Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Glasgow (Housing Stock)

Mr. Maxton: asked the Secretary of State for Scotland if he has received from Glasgow district council any assessment of extra expenditure following the damage done to its housing stock during the recent severe weather.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): While it is still not possible to give a firm figure for the expenditure involved, I understand that the council now estimates the cost to be about £13 million. This includes both the estimated cost of repairing damaged property and other additional expenditure incurred by the council as a result of the weather emergency.

Mr. Maxton: Is the Minister aware that thousands of my constituents and others in Glasgow are living in appalling conditions because of burst pipes? Will he give an undertaking that the Government will provide Glasgow with extra money to ensure that repairs are carried out as expeditiously as possible to alleviate the misery?

Mr. Rifkind: The hon. Gentleman will appreciate from my main answer that the cost to Glasgow was substantially less than was originally suggested by both the council and Labour Members. The European Community is providing certain funds to the United Kingdom, of which Scotland will get its full share. The money will be distributed to those who have suffered loss as a result of the damage.

Mr. Pollock: Will my hon. Friend confirm that the Government are prepared to make central funds available to assist local authorities with the cost of repairing damage caused by frost and in undertaking snow clearing operations following the recent severe weather?

Mr. Rifkind: I confirm that the Government have repeatedly offered help to local authorities following weather damage in the same way as the previous Labour Government offered assistance. Regional councils that suffered damage to their roads as a result of the emergency will receive help in the way that has been determined.

Mr. Dewar: Does the Minister accept that, although the sum may now be substantially less than was feared, £13 million is still a substantial sum, and that if the Glasgow district council has to meet the bill the impact on

its budget will be horrific? Does he agree that any help from the European Community is likely to be inadequate when measured against the need? In the circumstances, will he not stand on the niceties of what is insurable and what is non-insurable but take a sympathetic view of the genuine need for help? Many properties are derelict and many tenants have suffered great hardship. I am sure that the Government will be judged on the sympathy of their approach.

Mr. Rifkind: The help from the European Community will be directed to individual householders and not to local authorities. My officials and Glasgow district council officials have been discussing the expenditure involved, especially the proportion that would have been insurable if the council had followed the advice of the Labour Government. It is clear that a significant proportion of the expenditure may not have been insurable in the normal course of events. If that is confirmed—we do not yet know what the figure will be—that sum will be eligible for grants in the normal way.

Cunninghame District Council

Mr. Lambie: asked the Secretary of State for Scotland what request he has received from Cunninghame district council for a meeting with him; what reply he has sent; and if he will make a statement.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): My right hon. Friend shares Cunninghame district council's concern about unemployment in the district and has agreed to its request for him to meet a delegation on 17 March.

Mr. Lambie: I thank the Minister for that reply. He knows that one of the questions that the district council will wish to raise with the Secretary of State is the future of the Scotboard factory at Irvine. Will he confirm that a party from the People's Republic of China recently visited the chipboard factory at Irvine with a view to inspecting and purchasing the machinery? Is Caberboard, the company that the Government are pushing, more concerned with asset-stripping than with providing work for the many unemployed in Irvine?

Mr. Fletcher: A company that is not Chinese is distinctly interested in the Scotboard premises to create new products and jobs in Ayrshire. Details are still being finalised. I am sure that the hon. Gentleman will be among the first to welcome the project if, as we believe, it gets off the ground in the near future.

Mr. Corrie: rose—

Mr. Speaker: Order. I thought that this was a constituency question. Does it involve the hon. Gentleman's constituency?

Mr. Corrie: Yes, Mr. Speaker. When my right hon. Friend meets representatives of the Cunninghame district council, will he discuss with them the possibility of including ASSET—the Ardrossan, Saltcoats, Stevenson Enterprise Team—in the new enterprise allowance scheme? Is he aware that there are three pilot schemes in operation in England, but as yet there is not one in Scotland? Surely ASSET would be ideal.

Mr. Fletcher: We are following closely the success of the pilot schemes in England. As soon as we have evidence


that they are working well, as we expect, we shall be happy to take the earliest opportunity to introduce such a scheme in Scotland.

Lorry Routes

Lord James Douglas-Hamilton: asked the Secretary of State for Scotland what progress has been made and is being made towards designating lorry routes in cities in Scotland; and whether he will issue any guidance to local authorities in this connection.

Mr. Rifkind: Surveys aimed at identifying lorry routes within their areas have been carried out in all the regions. Traffic regulatory orders relating to lorries have been made for Edinburgh, Aberdeen and Dundee, but not for Glasgow.
I am considering issuing further advice to local authorities to help them to make the most effective use of their powers to restrict heavy lorries to suitable routes.

Lord James Douglas-Hamilton: Is my hon. Friend aware that his statement will be welcomed by countless residents who hope that lorry routes will be designated in major cities, especially if lorry weights are to be increased marginally?

Mr. Rifkind: The power is available to local authorities, and we are anxious that, where appropriate, it is used to the advantage of local communities.

Mr. Foulkes: Does the Minister recall the reply that he gave to me that there would be no extra bypasses, or no advancement of proposed bypass development, following the recommendations of the Armitage report? If the Government agree to 40-tonne lorries, will he ensure that they stop at the border?

Mr. Rifkind: I am not clear about the first part of the hon. Gentleman's question. The Government are considering a large number of bypass proposals. Indeed, 11 bypasses are either being constructed or are at a very advanced stage of preparation. The Government believe that bypasses are an important part of the roads programme.

Sir Russell Fairgrieve: Does my hon. Friend appreciate that, although we must bear in mind proper environmental control, commercial firms in Scotland in general, and in Grampian in particular, are losing out financially and commercially because of their inability to use larger lorries?

Mr. Rifkind: My hon. Friend is correct in relation to Scotland. Because it is further from the markets and sources of supply, Scotland might benefit more from heavier lorries. I emphasise that no final decision has been taken. My hon. Friend's point is relevant.

Mr. George Robertson: When considering the question of heavier lorries, will the Minister bear in mind the problems of parking in towns, such as Hamilton which is just off the main motorway, because greater aggravation will be caused if more and heavier lorries are on the roads?

Mr. Rifkind: Yes. I emphasise that the use of the powers to which I referred in answer to the original question can be initiated by the local authorities. The orders to which I referred can by promulgated by the local authorities. The hon. Gentleman should put the merits of his case to the relevant local authority.

Housing (Dampness)

Mr. David Marshall: asked the Secretary of State for Scotland whether, in view of the fact that over 35,000 houses in Glasgow suffer from dampness, he will make special additional resources available to Glasgow in order to tackle this problem.

Mr. Rifkind: I am aware of the serious problems facing Glasgow and other authorities. The cost of treating houses affected by dampness was a factor to which special weight was given in setting the provisional allocations for 1982–83.

Mr. Marshall: The Government treat the matter so seriously that the Secretary of State and the Minister would not meet representatives of the Glasgow anti-dampness campaign or visit damp houses in Glasgow. Will the Minister now give the problem the priority that it deserves and come to Glasgow to see for himself the extent of the problem and the way in which housing standards are being undermined by dampness? Will he provide the extra money needed for Glasgow?

Mr. Rifkind: The hon. Gentleman is being extremely unfair. We were unable to meet representatives of that organisation on the day that they were in London. I visited one area of Glasgow, as the guest of the Glasgow district council, to look at the problems of dampness. That was one of the first duties that I undertook when I became a Minister. When we calculated Glasgow's supplementary allocation a couple of months ago we included an extra £2½million specifically to deal with dampness.

Mr. Grimond: If the Minister wishes to experience real dampness, he should come to Orkney and Shetlands. Does he agree that one way of dealing with the problem is to make extra social service payments available to the poorer people who have to sleep in damp houses in an extremely damp and cold climate?

Mr. Rifkind: The right hon. Gentleman does the House a service by pointing out that the problem is not limited to the major conurbations. Government funds are available to help people to pay their heating bills.

Mr. McQuarrie: I accept what my hon. Friend said about the 35,000 houses in Glasgow, but is he aware that there are more than 150,000 houses in Scotland, covering all the local authorities, that are built to Parker Morris standards? Does he agree that the stage has been reached when there should be a complete investigation into the problems of dampness in Scottish houses so that local authorities may give help to relieve the misery?

Mr. Rifkind: A number of investigations have taken place in the last few years. They have provided a great deal of useful technical information on the best means of tackling the problem. In response, the Government have not only taken major steps to make the information available to local authorities, but have, for the first time, made it a major consideration in determining allocations to local authorities for housing programmes.

Mr. Millan: The Minister has acknowledged that we are discussing a serious problem which affects the whole of Scotland, not just Glasgow. Is he aware that the Glasgow district council has already announced that, unless there is a generous settlement by the Government to deal with freeze damage, a large proportion of the


money set aside for remedial work to cure dampness will have to be used to repair freeze damage? Is he further aware that the people now living in extremely insanitary conditions will have to live in those conditions for that much longer?

Mr. Rifkind: That was said by the Glasgow district council when it was thought that the cost of the damage would be between £20 million and £30 million. The latest estimate is that it will cost only £13 million. Government help depends upon the proportion of expenditure that is non-insurable. The evidence that we are now receiving from Glasgow shows that a proportion of its expenditure is likely to have been non-insurable and will, therefore, be eligible for Government grants. We have made it clear all along that if it was not insurable, consistent with the circular it would be possible to give help.

Mr. Milan:: What percentage was non-insurable?

Mr. Rifkind: The matter is being discussed by Scottish Office officials and the Glasgow council. It is not possible to give a specific figure, but it will be a significant proportion. I cannot say what the precise amount will be.

Nuclear Programme

Mr. Home Robertson: asked the Secretary of State for Scotland if he will issue a Command Paper setting out the Government's policy for Scotland on the recommendations made by the Energy Committee on the Government's new nuclear programme.

The Secretary of State for Scotland (Mr. George Younger): No, Sir. The Government's response to the report of the Select Committee on Energy is set out in Cmnd. 8317 and includes comments on the Scottish issues involved.

Mr. Home Robertson: Where was the Secretary of State when the House debated the Select Committee's report? Will he now make a statement on the increasing excess of generating capacity over demand in Scotland, caused partly by a drop in demand resulting from the Government's disastrous economic policies? Will the right hon. Gentleman say something to reassure my constituents whose jobs depend on Cockenzie power station?

Mr. Younger: I hope that the hon. Gentleman has not forgotten those whose jobs depend on the construction of Torness power station. The hon. Gentleman seems to be somewhat ambivalent towards that aspect. The overcapacity in the Scottish electricity system is caused by many factors. The closure of the Invergordon smelter has made a considerable difference. I was interested in the points made in the debate to which the hon. Gentleman referred. I read his contribution with great interest.

Mr. Gordon Wilson: Does the Secretary of State recognise that his absence from that important debate was a contempt of the House? The right hon. Gentleman is the Minister in charge of one of the biggest electricity generating bungles in the United Kingdom. That being so, what are his plans to deal with over-generation in Scotland? Does he realise that the consumer has to pay for the extra power stations that are not required because of Government policy and the inability of the industry to accustom itself to the drop in demand over about eight years?

Mr. Younger: The hon. Gentleman could not be more wrong in his assessment. The consumer principally will benefit from Torness power station, which, when completed, will produce cheaper electricity than any of the other stations in Scotland. I should have thought that the hon. Gentleman would be pleased about that.

Mr. Ancram: Nevertheless, does my right hon. Friend accept that the present over-capacity in Scotland is costing the consumer more than it needs to cost? May we have an assurance that in future decisions on power stations, such as Torness, a closer assessment will be made of the demand and cost implications in the interests of the consumer, instead of allowing the South of Scotland Electricity Board to go ahead on the ground of prestige rather than of practical necessity?

Mr. Younger: I cannot agree with my hon. Friend. The greatest care was taken to make an assessment of the financial implications of going ahead with the Torness power station. Indeed, as I have already said, it is because it should make electricity cheaper for the consumer that the building of that station has gone ahead.

Mr. Harry Ewing: The right Gentleman referred to the closure of the Invergordon smelter. Does he agree that the principal issue involved in that closure was the cost of energy to British Aluminium? As the scheme announced by the Chancellor in last year's Budget has not been extended by the Secretary of State to cover Scottish industry—because the right hon. Gentleman does not think that Scottish industry is at a disadvantage in respect of energy costs—may we have an assurance that in the Budget a week next Tuesday the discount scheme for industry will be extended to Scottish industry?

Mr. Younger: The hon. Gentleman is talking about two completely different things. On the one hand, he is talking about the cost of electricity to industry in general. On the other, he is talking about the cost of the special arrangements for the smelter. Both are important but quite different matters. We have clarified the point about the general electricity discount scheme and have pointed out that, on the whole, Scottish electricity prices are lower than those in England. I have made it clear that we are doing everything in our power to find someone new to operate the smelter, and a new power contract will be very much part of that operation.

Football Matches (Arrests)

Mr. Ron Brown: asked the Secretary of State for Scotland how many people were arrested at football matches during 1981.

Mr. Rifkind: Information on the total number of people arrested at football matches is not collected by my Department.

Mr. Brown: The lack of statistics probably explains a lot about the Government. Does the Minister accept that many of those arrested at football matches have religious differences and, regrettably, attend specifically not to watch football? I am thinking particularly of Rangers and Celtic supporters. Is it not a disgrace that the Rangers football club employs no Catholics either in the club or in its playing team? Is it not about time that that was made illegal? Is it not time that the Government said something about it? It is discrimination—

Mr. Speaker: Order. The hon. Gentleman can question the Minister only about those matters for which he is responsible.

Mr. Maxton: The Government introduced legislation on drink at football grounds. Does the Minister agree that the Government could more responsibly monitor the working of that legislation by keeping statistics on the number of football fans arrested at football matches?

Mr. Rifkind: Perhaps I can give the hon. Gentleman the assurance that he is seeking. We do not have information about the number who have been arrested, which covers a whole series of different circumstances, but we do have information about the number of new offences under the Criminal Justice Act. There were 231 offences for being drunk in, or attempting to enter, designated sports grounds; 12 offences for possessing alcohol travelling to or from a sporting event; and 186 offences for the possession of controlled containers or alcohol when attempting to enter designated sports grounds. Those statistics are collected and are essential for the monitoring exercise.

Later—

Mr. Brown: On a point of order, Mr. Speaker. I refer you to my earlier question about the policy of Rangers football club indiscrimination against Catholics. May I ask you to whom I should address a question about discrimination? Should I address it to the Home Secretary, the Prime Minister, the Secretary-General of the United Nations or perhaps to God? To whom do I address it?

Mr. Speaker: If I may make a constructive suggestion to the hon. Gentleman—I am trying to be helpful—I advise him to go to the Rangers football club. There is no answer here to the problem. We are not responsible for what either Rangers or Celtic—I want to be impartial—does.

Unemployment

Mr. McKelvey: asked the Secretary of State for Scotland what plans he has to reverse the continuing upward trend in unemployment in Scotland.

Mr. Alexander Fletcher: We are taking firm steps to control inflation—the main reason for the loss of markets and of jobs—and to encourage the expansion of existing firms and the starting up of new ones.

Mr. McKelvey: I am sure, Mr. Speaker, that you will share my disappointment that the Minister has trotted out the same stuff as he trotted out in the Scottish Grand Committee. Is not unemployment in Scotland getting worse primarily because of the Government's present policies? Will the Minister and the Secretary of State show some backbone, throw off the shackles of the monetarist policies of the Government and take the initiative to release the strictures placed on local government public spending? If that were done, the building industry in Scotland would perhaps start to expand before it disappears altogether.

Mr. Fletcher: Such policies cause inflation and, therefore, unemployment. The upward trend in unemployment will be reversed only by improved output per man and woman in employment in Scotland. There is no magic solution to the situation. Nevertheless, job prospects are

encouragingly good. The hon. Gentleman will know that in recent weeks, on Clydeside alone, Scott-Lithgow, Govan Shipbuilders and Yarrow have announced orders worth more than £200 million, and other Scottish companies are competing well in a difficult international situation.

Mr. Russell Johnston: What is the Minister doing to speed up the decision from his Department and the SDA on the imaginative proposals of Messrs Elias and Robertson to reopen the pulp mill at Fort William, which would create much needed jobs? In particular, what is he doing to prevent the sale of essential machinery by Wiggins Teape?

Mr. Fletcher: We are still in close consultation with Mr. Robertson and his proposed partner. This is a difficult and complex issue. Frankly, I think that they were a little over-optimistic to begin with as to their chances of finding private capital. We are trying to help on both counts—to raise private capital and to make public funds available for a viable project. As to the equipment in the pulp mill, we are in close consultation with Wiggins Teape, which will move nothing out if, by doing so, it would destroy any prospect of a viable operation.

Mr Myles: Does my hon. Friend agree that it is slightly anomalous that, on the one hand, the Government lash out a large amount of public money to encourage employment and, on the other, do not allow someone who wishes to employ on a personal basis to make the wages tax deductible?

Mr. Fletcher: I am not sure that I follow my hon. Friend's point. I thought that he was going on another tack, so I shall answer the point that I thought he was making. Local authorities agreed with the Government to make grants available in their areas to provide jobs, but they then taxed those jobs away with high rates increases.

Mr. Gregor MacKenzie: Is the Minister aware that, whether there is an upward or a downward trend in unemployment as a result of yesterday's figures, the majority of us think that unemployment is still too disastrously high? During the next few weeks will he talk to his right hon. and learned Friend the Chancellor of the Exchequer and indicate, as the CBI has done, that Scotland requires extra money to improve its infrastructure, particularly in the industrial belt? The new infrastructure would create new jobs and make Scotland a more attractive place for inward investment.

Mr. Fletcher: I agree with the right hon. Gentleman that we must always try to make Scotland more attractive to investors, both inward and indigenous. The most attractive thing that we can provide is improved productivity. There are areas in Scotland, not least in the public sector, where productivity is lagging behind that not just in Europe but in other parts of the United Kingdom. If we want to attract jobs, we must prove that we can produce the goods at least as well as anyone else in Europe.

Mr. Fairbairn: I do not wish to usurp the function of my hon. Friend who is responsible for education, but I return to the question posed by my hon. Friend the Member for Banff (Mr. Myles). A serious situation affects Scotland particularly, because people who pay out of their own income for their own employees are taxed twice. In


other words, they pay for the gross income out of their taxed income. Can there not be some understanding so that the position in rural Scotland might be relieved?

Mr. Fletcher: I shall certainly look into that point.

Mr. Harry Ewing: Does the Minister appreciate that he is the last person to lecture industry on productivity, when we examine his productivity? How can he be so abysmally complacent against the background of these disgraceful unemployment figures? Will he stop deceiving the people of Scotland about an upturn in the economy when he and the Secretary of State know that the figures will get worse? When will we get some positive action to deal with the disgraceful unemployment situation in Scotland?

Mr. Fletcher: There is no complacency by the Government about unemployment in Scotland or its economy. It is reasonable to remind Labour Members that in the past few weeks shipbuilding orders worth more than £200 million have been achieved on the Clyde alone at a time when competition is severe. The Government accept the criticisms that are made when unemployment figures are as high as they are, but we believe that we have a right to point to the good news about jobs and orders in Scotland. That is what my right hon. Friend and I are doing.

Crofter Housing

Mr. Donald: Stewart asked the Secretary of State for Scotland if he will now raise the level of grant and loan for the building of crofter housing.

Mr. Younger: I refer the right hon. Gentleman to the reply I gave to the hon. Member for Caithness and Sutherland (Mr. Maclennan) on 18 February. As I said then, I am currently reviewing the levels of assistance available under the present scheme, but it is too early to say what the outcome will be.

Mr. Stewart: Does the right hon. Gentleman accept that four years have gone by since the figures were last raised and that there have been considerable increases in the costs of materials and labour? Ought he not, in fairness, to make adjustments along these lines? Does he also accept that this scheme is still a fair bargain for local authorities, that might have to expend £30,000 on providing a local authority house when a crofter might require accommodation?

Mr. Younger: I appreciate the right hon. Gentleman's comment, and these are some of the matters that I shall take into account in my review. However, as I am sure he will know, the scheme as it stands still represents a good deal for the crofters, too, considering that the maximum amount of aid that can be got for a house is £4,000 and that the rate of interest is 3⅛per cent., which must be an advantage in present conditions.

Scottish Economy

Mr. Canavan: asked the Secretary of State for Scotland whether he will make a statement about the state of the Scottish economy.

Mr. Younger: Against a background of considerable national and international economic difficulty, the Scottish economy has experienced a fall in activity and

employment which has been slightly less severe than for the United Kingdom as a whole. The trend in most of the major economic indicators is now more encouraging than for some time.

Mr. Canavan: What hope is there for the Scottish economy and for the 350,000 unemployed Scots after that depressing drivel by the Prime Minister last night when she made a cheap attempt to put the blame for mass unemployment on the unemployed? As even some Tory MPs are now demanding a £6 billion reflation of the economy in the forthcoming Budget to alleviate unemployment, will the Secretary of State back, within the Cabinet, even that modest proposal, or will he continue forever his dumb subservience to that demented woman who is wrecking the Scottish economy?

Mr. Younger: I detected no such remark or implication in the excellent speech that my right hon. Friend the Prime Minister made last night. It was extremely well received by those of the engineers who were there. With regard to the major problem, as the hon. Gentleman knows, not even he can alter the fact that this country has been going through one of the most difficult recessions in his lifetime.

Mr. Canavan: The right hon. Lady has made it worse.

Mr. Younger: The hon. Gentleman refuses to acknowledge the vast amount of help and aid, at great expense, that the Government have put into saving people from losing their jobs, notably in the steel industry, British Leyland and throughout private industry as well. I should have thought that he would be grateful for that.

Sir Hector Monro: Does my hon. Friend agree that the best permanent export that Scotland could make would be the hon. Member for West Stirlingshire (Mr. Canavan)? Does he also agree that in January Scottish-based firms gained export orders worth £62 million and Scottish-based firms achieved contracts for £32 million for expenditure within Scotland? Is this not a very encouraging sign?

Mr. Younger: I entirely agree with my hon. Friend, although I cannot agree that there is any great probability of our being able to export the hon. Member for West Stirlingshire (Mr. Canavan) as I do not detect a g-eat deal of demand for the product.
However, even in times of difficulty a number of films in Scotland have been extremely successful in exporting. There are many thousands of people in jobs in Scotland who can look forward to secure employment, notably on the Clyde, where a new order for Yarrow (Shipbuilders) Ltd. was announced only yesterday.

Mr. Millan: Is the Secretary of State aware that far from the Prime Minister's speech being extremely well received, it will be extremely badly received by the 3 million unemployed, including the 325,000 jobless in Scotland? What we need in the coming Budget i; a massive boost to the economy. As previous Tory Budgets have been disastrous for Scotland, if the Secretary of St ate has any influence in the Cabinet will he use it to prod ice for once a Budget that is good for Scotland?

Mr. Younger: The right hon. Gentleman should take the time to read the whole of the speech made by my right hon. Friend the Prime Minister last night, because in it she made it clear that the Government's top priority has to be to enable people who have lost their jobs to have some


chance of obtaining new ones. The only way to do that is to stop people pricing themselves out of jobs as they did with many of the disastrous policies that he and his right hon. Friends followed for many years.

Later—

Mr. Fairbairn: On a point of order, Mr. Speaker. In view of your exalted campaign to preserve the standards of Parliament, is it in order for an hon. Member to describe a right hon. Member as a "demented woman", even if it comes from the hairy lips of a demented man?

Mr. Canavan: Further to that point of order, Mr. Speaker. If it pleases the hon. and learned Gentleman, I shall change the phraseology and call her the "right hon. demented woman".

Mr. Speaker: Order. Very often it is a matter not of order but of taste. I leave the matter there.

Scottish Development Agency (Glasgow)

Mr. James Hamilton: asked the Secretary of State for Scotland when he next expects to visit the offices of the Scottish Development Agency in Glasgow.

Mr. Fletcher: My right hon. Friend's next visit to the agency's office in Glasgow is likely to be sometime in March, when he will chair a meeting of the Locate in Scotland steering group.

Mr. Hamilton: When the hon. Gentleman visits the offices will he take to task the people at the SDA who are reported to be spending £700,000 on refurbishing and expanding those offices? Does not the hon. Gentleman think that that is a downright scandal, bearing in mind the numbers of employers who look for an advancement from the SDA? Does he realise that reports yesterday said that the construction industry is in the worst state that it has ever been in the history of Scotland? Is it not time to do something?

Mr. Fletcher: Proposals to improve the accommodation at Bothwell Street in Glasgow are at an early stage, and my right hon. Friend will be consulted before any decision is taken. As the hon. Gentleman and his hon. Friends, like Government Members, fully support the SDA in its work, they must agree that it must have proper accommodation to carry out the duties that both sides of the House consider to be most important.

Mr. Bill Walker: When my hon. Friend visits the SDA will he take the opportunity to discuss with the officials there the defence 'expenditure that will arise from the Trident base and ensure that the SDA is ascertaining properly and fully from the Property Services Agency that Scottish consultant engineers and contractors will be given the opportunity to quote for the many jobs in the development?

Mr. Fletcher: I agree with my hon. Friend, but that is a matter not for the SDA but for the Scottish Office and the Ministry of Defence.

Students (Qualifications)

Mr. Douglas: asked the Secretary of State for Scotland if he will make a statement on the numbers of students who will leave Scottish schools in the summer of 1982 possessing university entrance qualifications.

Mr. Alexander Fletcher: Entrance qualifications vary between universities and between departments. I therefore cannot make an accurate estimate of the figure which the hon. Gentleman is seeking.

Mr. Douglas: When the result becomes clear post hoc will the Minister concede that there will be a demand for places in Scottish universities that will not be able to be fulfilled because of the cuts in the university education brought about by the University Grants Committee and his right hon. Friend the Secretary of State for Education and Science? Will he examine the position by which grants for technological universities and other universities are being cut at a time when universities on a collegiate basis in England are expanding, thereby making the apportionment of UGC funds unfair to Scotland?

Mr. Fletcher: I deny the last point. Scotland has come out of the UGC's reappraisal better than any other part of the United Kingdom. Knowing the right hon. Gentleman's interest in technology and subjects of that kind, I presume that he will welcome the fact that the UGC, in carrying out its strategy, has aimed at a policy of a shift in the balance of university places so that student numbers will increase in the subjects with which he is concerned.

Mr. Henderson: As there will be a substantial fall in the number of people who will reach the age of 18 in every year from next year to 1990, together with more money being spent per pupil in Scotland than ever before, can we hope for a significant improvement in the proportion of children who achieve university qualifications?

Mr. Fletcher: At present, the numbers who are achieving university entrance type qualifications is on the increase. As my hon. Friend will be aware, not every school leaver who achieves those qualifications wishes to go to university. Some wish to enter employment immediately and others go to colleges of various sorts.

Mr. O'Neill: Is the Minister aware that the institute that the Government are trying to starve of resources—Stirling university—is experiencing an increase in applications of 9 per cent., whereas in the United Kingdom as a whole the increase is only 3 per cent.? Is he satisfied that he is giving adequate backing to that institution, which needs the support of everyone in Scotland?

Mr. Fletcher: The hon. Gentleman will be aware that the allocation of funds to universities is entirely a matter for the University Grants Committee.

Agriculture

Mr. Pollock: asked the Secretary of State for Scotland whether he is satisfied with the current state of Scottish agriculture; and if he will make a statement.

Mr. Younger: The facts are fully set out in the White Paper "Annual Review of Agriculture 1982", Cmnd. 8491, published on 17 February. There are encouraging signs of improvement in farming income from last year's very low figure, though I remain very concerned about the level of borrowing and the drop in investment.

Mr. Pollock: Will my right hon. Friend confirm that he is aware of the great concern in Scottish farming about the proposal for a possible revaluation of the green pound


during the forthcoming European price review? Can he assure us that he will do everything in his power to withstand any such proposal?

Mr. Younger: I fully appreciate my hon. Friend's point. It is an early stage of the CAP negotiations, but my right hon. Friend the Minister of Agriculture, Fisheries and Food made our position clear in the opening stages of negotiation and rejected the Commission's proposal for a revaluation of the green pound.

Mr. Strang: Is the Secretary of State aware that the massive and unprecedented slump in investment in tractors and other equipment by agriculture in Scotland is a direct cause of the loss of thousands of jobs in the British engineering industry? Will the Government take a leaf out of the book of the French Socialist Government and introduce national aids to support our agriculture?

Mr. Younger: I am sorry that the hon. Gentleman seems to be suffering from a touch of amnesia. He should remember that the main reason for the disastrous state of investment in the agriculture industry was the persistent refusal of the previous Government to allow the green pound to devalue to a reasonable level which would give a fair deal to our farmers. If he does not realise that, I assure him that all our farmers do.

Sir Russell Fairgrieve: Does my right hon. Friend accept that in recent years the percentage return on capital investment in agriculture has been falling? If so, will he do what he can with his right hon. Friends in the Government to change that state of affairs?

Mr. Younger: I share my hon. Friend's concern. It is a reflection of the difficult times and falling incomes that farmers have been experiencing for several years. I assure my hon. Friend that the extra aid that the Government have given to farmers has so far managed to reverse that process. We hope that argriculture can look to the future with more confidence.

Mr. O'Neill: Does the Secretary of State agree that the fall in incomes has now, in the words of the National Farmers Union, rendered them totally inadequate to stimulate investment? Further, is he aware that the incomes are now at a level below that of 1979 when the Labour Government left office? It is not good enough for him to say that investment fell under the Labour Government. Incomes were high enough to allow that investment. They are now much too low to afford it.

Mr. Younger: The hon. Gentleman has presented a completely false picture. As he should know, the Labour Government doggedly refused to give our farmers a square deal by devaluing the green pound. What is more, the Government have given far greater aid than any previous Government, especially on hill livestock compensatory amounts, the new suckler cow premium scheme and the new arrangements for the sheep meat regime, all of which have been major and favourable changes in the treatment of farming.

Assisted Area Status

Sir Hector Monro: asked the Secretary of State for Scotland what consultations he is having with the Scottish Development Agency and the local authorities about the changes in assisted area status later this year.

Mr. Younger: There is close contact with the Scottish Development Agency on matters of this sort, and the proposed changes have been discussed on a number of occasions with local authorities. The points made in discussion will be taken into account in the review of those areas which are due to become non-assisted on I August as a result of being downgraded by more than one step.

Sir Hector Monro: Does my right hon. Friend agree that it is most important that he has discussions this summer, before a final decision is taken, with the local authorities so that they can explain their local problems and bring to his notice their wish to retain their present status?

Mr. Younger: I appreciate my hon. Friend's remarks. Of course I shall be anxious to hear any views that local authorities or others wish to put to me on those points.

Mr. David Steel: Is the Secretary of State aware that there is now some evidence that firms may be considering moving out of places such as the Borders to areas where development assistance will continue? Would it not be cheaper for the taxpayer, and more sensible in the long run, for the Secretary of State to come up with a scheme before 1 August to encourage industry to expand where it already is in Scotland?

Mr. Younger: I agree that encouraging industry to expand is desirable, wherever it is. However, the right hon. Gentleman must recognise that the point of regional policy is to concentrate resources where they are most needed. A regional policy that fails to do that is not doing the best possible job for the areas in greatest need.

Mr. Harry Ewing: Is the Secretary of State aware that the hon. Member for Dumfries (Sir H. Monro) was a member of the Government that took the decision about which he now complains? If the hon. Member for Dumfries feels that the Government of which he was a member got that decision wrong, does it not concern the Secretary of State that the decision is wrong, and does he agree that the question of assisted area status should he examined in more detail before irreparable damage is done to what is left of a very depressed Scottish economy?

Mr. Younger: The hon. Gentleman did not listen to my hon. Friend's question. My hon. Friend was part of the Government who decided to make the changes and also to have a review this year. My hon. Friend was asking for information to be received as part of that review, which he was right to do.

Job Creation

Mr. Grimond: asked the Secretary of State for Scotland what estimate he can give of the new jobs created, or which have been promised, in Scotland so far in the current year.

Mr. Younger: Records of new jobs created cannot be accurately kept as they are the result of numerous decisions by many companies throughout Scotland. However, announcements made public during the past few months alone cover over 6,000 new jobs. My Department has made 130 offers of selective financial assistance during the current financial year to projects involving more than £410 million of investment and over 14,500 jobs.

Mr. Grimond: Is the Secretary of State aware that the House will be glad to hear that there are 6,000 new jobs


and that his Department is offering so much money? However, that is not a large contribution in the light of the level of unemployment in Scotland. Will the right hon. Gentleman use his undoubtedly great influence with the Chancellor of the Exchequer to see that he reduces the taxation on employing people, through the national insurance contribution, and also reduces the cost of energy to industry?

Mr. Younger: I am grateful to the right hon. Gentleman for his
assessment of my great influence with my right hon. and learned Friend the Chancellor. I shall make sure that those points are fully represented to the Chancellor. The difficulty is not that of finding money to support new projects, but that of finding the projects in the first place. All our attention is turned to that.

Dr. M. S. Miller: May I draw the right hon. Gentleman's attention to the speech of his right hon. Friend the Prime Minister last night, in which she played down the advantages of North Sea oil in previous years against the disadvantages now, when the price has dropped? How many new jobs were created last year when we were in the advantageous position of having North Sea oil?

Mr. Younger: I do not know whether the hon. Gentleman has had a chance to read the full version of my right hon. Friend's speech, but that is not a proper reflection of what she said about North Sea oil. She made it quite clear that if the price of North Sea oil continues to fall it will pose some problems in balancing our budget, as we are major producers. No one, least of all my right hon. Friend, is in any doubt about the benefits of North Sea oil. We now have 90,000 to 100,000 jobs in Scotland because of it.

Mr. Ancram: Does my right hon. Friend accept that the prospect of bringing new jobs to Scotland is not helped by the constant talking down of Scotland by Opposition Members? If they are concerned about bringing new jobs to Scotland, can they not be more constructive?

Mr. Younger: I sympathise with my hon. Friend. Although I am not surprised that Opposition Members share our great concern about the difficulties in the economy and unemployment, it is a mystery why no Opposition Member seems capable of welcoming any good news.

Mr. Gordon Wilson: In the interests of objectivity, will the Secretary of State give, for the period when the 6,000 jobs have been created, the figure for those that have been lost? What steps do he and his colleagues in the Government intend to take constructively to refurbish and change the system of regional incentives, as the present system seems to be collapsing?

Mr. Younger: I do not accept that. The present system of regional aid is competitive with what is provided in other countries with which we compete for inward investment. Now that the system is concentrated in the Locate in Scotland office, we are able to do a thoroughly professional job in attracting new industry to Scotland. I should have thought that the hon. Gentleman would welcome that.

Rent (Scotland) Act 1971

Mr. McTaggart: asked the Secretary of State for Scotland what representations he has received to amend

the provisions of section 1(2) of the Rent (Scotland) Act 1971, as amended by the Rent (Scotland) Act 1974, which exempts tenancies where the rent includes payments in respect of board from the general provisions regarding rent regulations, so as to make any such lettings to students attending full-time courses at a university or college of further education liable to regulation.

Mr. Rifkind: We have had representations very recently from a number of hon. Members, to which replies will be sent shortly. As indicated in the reply that was given on 10 February to the right hon. Member for Western Isles (Mr. Stewart), legislative provision relating to the private letting of houses introduced by successive Administrations in the past has been consistent in not applying to tenancies of this kind, and we have no proposals for amendment.

Mr. McTaggart: Is the Under-Secretary aware that many students are denied the protection of the Rent (Scotland) Act 1971 for the fair fixing of their rents because they have signed bed and breakfast agreements with unscrupulous landlords? The landlords get round the rule by delivering bread rolls and milk to some flats and requiring other students to travel some distance to obtain their food. What steps does the Under-Secretary propose to rid us of those Rachmans?

Mr. Rifkind: I accept that the problem exists. The hon. Gentleman must appreciate that successive Governments have found it difficult to discover a definition that would provide protection where it was required but would not extend it to boarding houses or hotels that provide board and lodging. Such problems have been difficult to accommodate when we have tried to find proper protection for those who can reasonably expect it.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Meehan Case

Mr. Gordon Wilson: asked the Solicitor-General for Scotland if he has studied the report by Lord Hunter on the Meehan case in so far as it affects the Crown Office.

The Solicitor-General for Scotland (Mr. Peter Fraser): I am presently considering these aspects of the report along with my noble and learned Friend the Lord Advocate.

Mr. Wilson: As I am the first to address a question to the Solicitor-General since his appointment, may I congratulate him on his elevation to the Front Bench, even if it may be a step towards a judicial bench after the next election? How long do he and his noble and learned Friend intend to take to consider the Meehan report, which has now been under wraps for several years? What were the shortcomings of the Crown Office, which have been reported in the press, and what steps have been take to improve the position in the Crown Office in view of the recent Glasgow rape case, which has also undermined confidence in that office?

The Solicitor-General for Scotland: I am grateful to the hon. Gentleman for what I take to be a back-handed compliment. The report by Lord Hunter has been before the Secretary of State only since August last year. A number of legal matters have been referred to my noble and learned Friend by the Secretary of State. Those are


presently being considered. My right hon. Friend the Secretary of State has repeated the statement that was made by the previous Secretary of State for Scotland, that it is his intention to publish the report in due course.

Mr. Fairbairn: May I add my congratulations to those made to my hon. Friend on his elevation and give him my good wishes? I wish to ask him about the Meehan report by Lord Hunter, with is complications. In view of the award of £77,000 to Mr. John Preece, who was released from prison after some eight years imprisonment, and regardless of when the Hunter report may be published, will my hon. Friend use his influence to ask the Secretary of State to review the award of a mere £7,500 which was rejected by Mr. Meehan for serving an equivalent term and when, after all, he was pardoned?

The Solicitor-General for Scotland: I am grateful to my hon. and learned Friend for his gracious remarks on my taking on this office in his steps. The question of compensation awards following on the release of Patrick Meehan from prison is for my right hon. Friend the Secretary of State. I am sure that he is aware that the specific terms of reference to Lord Hunter to examine the matters arising out of the Meehan affair and his conviction specifically exclude any consideration of compensation.

Mr. Milan: I also welcome the hon. Gentleman to the Front Bench.
Although the inquiry was carried out in private, I think that the hon. Gentleman is aware that a pledge was given by me that the report would be published. Therefore, there would be widespread indignation in Scotland if the report were censored in any way. Will he therefore repeat the assurance given by the Under-Secretary of State for Scotland on television the other day that the report would be published in full?

The Solicitor-General for Scotland: I am grateful to the right hon. Gentleman for his remarks. I appreciate that when he first announced the reference to Lord Hunter he said specifically that the report of the inquiry would be published in due course. My right hon. Friend the Secretary of State for Scotland has repeated that assurance. However, as the right hon. Gentleman is aware, a number of legal matters must be considered carefully with regard to publication. Accordingly, it would be premature for me at this time to give any indication of whether the report will be published in its entirety.

Mr. Millan: Is not the implication of what the hon. Gentleman is now saying that the report may not be published in full? However, the Under-Secretary gave us an assurance on television just a fortnight ago that the report would be published in full. What is the answer?

The Solicitor-General for Scotland: The implication of what I am saying to the right hon. Gentleman is not connected with whether the report will be published in its entirety. At this stage it would be premature for me to give any indication. In any event, the matter of publication is for the Secretary of State for Scotland. As the right hon. Gentleman knows, that report was ordered by the then Secretary of State. It was delivered by Lord Hunter to the present Secretary of State.

Kirkcaldy Victoria Hospital

Mr. William Hamilton: asked the Solicitor-General for Scotland if he has now received the report of the procurator fiscal on the fire that took place at Kirkcaldy Victoria hospital; and what action he intends to take.

The Solicitor-General for Scotland: For the reasons given in my letter of 19 February to the hon. Gentleman, the procurator fiscal at Kirkcaldy has still to submit a full report on this tragic fire, but it will be submitted to my noble and learned Friend, the Lord Advocate, in the near future. It is the intention of my noble and learned Friend to request that a fatal accident inquiry be held unless some unexpected information is received in the report from the procurator fiscal.

Mr. Hamilton: I commiserate with the hon. Gentleman for having joined such a dreadful Government. I thank him for his letter. When does he expect to receive the report from the procurator fiscal, and when will the fatal accident inquiry be held?

The Solicitor-General for Scotland: As I told the hon. Gentleman in my letter, the procurator fiscal has been seeking reports from such experts as the Fire Research Station at Borehamwood. The Health and Safety Executive is looking into the cause and the seat of the fire and why it appeared to travel so quickly. For that reason it has taken some time to make the investigations, but it is expected that the full report from the procurator fiscal will be available in the near future. Arrangements are already being made, but if my noble and learned Friend should apply for a fatal accident inquiry it would be a matter of weeks before it would commence.

Trading Standards (Prosecutions)

Mr. Henderson: asked the Solicitor-General for Scotland how many prosecutions for trading standards offences were mounted by the Crown Office for the most recent convenient period.

The Solicitor-General for Scotland:: There were 484 prosecutions in 1980 for consumer protection offences and for contraventions of the Food and Drugs(Scotland) Acts that can be said to fall into the category of trading standing offences.

Mr. Henderson: In taking up his office, on which all my hon. Friends join me in congratulating him, has my hon. Friend noticed that the Director General of Fair Trading has drawn attention to the fact that the fines for such offences in Scotland are less than half those in England? Does he agree that that is typified by the case in Fife recently when a licensee was fined only £5 for seeking to pass off a whisky of unknown origin as being a famous brand, which would certainly raise the spirits of the Scottish Bar?

The Solicitor-General for Scotland: My hon. Friend is correct to point to the report from the Director General of Fair Trading, which established that fines in Scotland were lower than those south of the border. However, the Government's responsibility is not to see what fines are imposed, but to ensure that the statutory penalties are kept under review. The Criminal Justice Bill allows for increases in the statutory penalties. I can understand that


the character of the particular case that my hon. Friend referred to outrages him, but I should point out that it was only a single whisky.

Warrant Sales

Lord James Douglas-Hamilton: asked the Solicitor-General for Scotland whether he has any plans to meet the Scottish Law Commission to consider the issue of warrant sales.

The Solicitor-General for Scotland: The Scottish Law Commission is already working on a report covering those aspects of the law of diligence, including warrant sales, covered by the five consultative memoranda published in October 1980. I welcome the priority that the Scottish Law Commission is according to this report. In view of the priority already being accorded to the preparation of the report I do not consider there to be any need for me to meet the Scottish Law Commission to urge that any greater attention be given to the issue of warrant sales.

Lord James Douglas-Hamilton: May I also warmly congratulate my hon. Friend the Solicitor-General on his first day of questions? May I request him to inform the Scottish Law Commission that the report's early completion would be very welcome?

The Solicitor-General for Scotland: I am grateful to my hon. Friend. I assure him that the completion of the

report is the Scottish Law Commission's first priority. It is also important that there should not be piecemeal reform of the law of diligence in Scotland. I hope that we shall see a complete report by the Scottish Law Commission on this very important matter in the near future.

Mr. Dewar: Although I accept that the report has now been given high priority, will the Solicitor-General accept that since time immemorial Ministers have said that it is top of the Scottish Law Commission's shopping list? Will he give us some idea when the House will have a substantive comprehensive report on which it can consider action? Otherwise, we shall return to the subject month after month at Scottish Question Time. That is not in the interests of any hon. Member.

The Solicitor-General for Scotland: I appreciate the hon. Gentleman's point, but I assure him that the report is at the top of the list. The hon. Gentleman will remember that the law on incest was being investigated by the Scottish Law Commission, and the report has now been completed. The law of diligence and its reform in Scotland is definitely the top priority for the Scottish Law Commission.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 12 MARCH

Members successful in the ballot were:

Mr. Frank Dobson 
Mr. Jim Callaghan
Mr. Tristan Garel-Jones

Floating Structures (Control)

Mr. Peter Viggers: I beg to move,
That leave be given to bring in a Bill to enable the Secretary of State to control the stationing of floating structures
When I originally applied to introduce a Ten-Minute Bill, I intended to introduce a Bill on a completely different subject. However, I have been overtaken by events and by an issue of overwhelming local importance that also has national significance.
There is a project to moor a tanker of 60,000 tons in the Solent, about one and a half miles from Cowes and about four miles from the mainland area of Fareham and Gosport. The project has been planned by a Danish consultant and is for a tanker to be used as a floating distrubution centre of liquefied petroleum gas. To understand liquefied petroleum gas, it might help to think of it as the type of fuel used in gas lighters. The liquefied petroleum gas—a mixture of butane and propane—will be brought from the Middle East about once a month in large tankers. It will then he put on board the floating distribution centre. It will be taken off the centre about three or four times per week by smaller tankers, which will then distribute it throughout North-West Europe.
It was envisaged that more than half of the LPG might go to Mobil Oil's cracker plant at Coryton in Essex. Not surprisingly, the proposal has raised a storm of protest in the area. Liquefied petroleum gas is highly inflammable. Accidents can happen. Only recently a large oil tanker went off course and ran aground quite near to the gas tanker's proposed mooring site. A collision between an oil or gas tanker and the moored liquefied petroleum gas tanker could result in a disaster of horrendous proportions. We can understand the emotion of those who have christened the proposal a "floating bomb".
However, in the interest of accuracy we must be fair to the scheme's proponents. Other LPG tankers use the Solent en route to Fawley oil refinery and about four or five LPG tanker movements take place each week. Reservoir gas tankers are used elsewhere in the world and I understand that there are three in use. The Solent project has been put together with proper regard for safety factors, and I make no criticism of the proponents of the scheme or of the British Transport Docks Board, which is responsible for the port of Southampton, in whose area the mooring site is located. They have consulted widely and I am satisfied that they are making detailed investigations.
The major oil company interested in the scheme—Mobil Oil—has been receptive to environmental and social aspects, and I can now inform the House that Mobil Oil announced yesterday that it has resolved not to participate in the project. The British Transport Docks Board is continuing its process of consultations. I understand that it will finish in about the middle of March. The board will then come to a conclusion and I think that it will conclude that no such scheme should go ahead.
If and when a decision is made not to proceed, a major point of law will remain. During discussions on the project, it became apparent that no Minister or Government Department had any power to prevent the mooring of a tanker and its use as a floating reservoir. The

proposal was to moor the tanker within the area controlled by the British Transport Docks Board. Had the proposal been to moor the tanker four or five miles further west—where the port of Southampton authority does not prevail—perhaps near the mouth of the Beaulieu river, no Minister or authority would have been able to prevent the project from proceeding.
There are some relevant Acts, but none directly prevents the continuation of the scheme. The Merchant Shipping Acts which deal with dangerous "goods" cover the carriage and storage of dangerous cargoes. The Health and Safety at Work etc. Act 1974 gives general control over safety at sea and on shore. Section 34 of the Coast Protection Act 1949 allows the Secretary of State for Trade to control construction which might be a danger to navigation. However, in that case, the Secretary of State can control the project on the basis of the vessel's size, but not in respect of its cargo.
Therefore, there is no overall proper control other than that which may be exercised by a port authority. The port authority has a statutory duty to provide port facilities, but no statutory duty to give general consideration to environmental factors. There is no general planning control over ships and floating structures near land. There is no general environmental control at sea.
I oppose the storage tanker proposal because it threatens the general amenity of the area, and particularly the sailing activity which gives so much pleasure to participants and spectators alike, and which adds so much character to the area, making it attractive to both residents and visitors.
There is no general planning restriction that requires the environmental interest to be taken into account. That is why my Bill sets out a planning requirement for moored tanker ships and other floating structures near land analogous to the planning requirement for power stations on land. My Bill would allow a public inquiry to be demanded in appropriate cases, so that all environmental factors could be considered.
I am, of course, aware that my right hon. Friend the Prime Minister asked my right hon. Friend the Secretary of State for Transport, who I am pleased to see in his place on the Front Bench, to carry out an inquiry into the general co-ordination of regulations, in this connection. I accept that my proposed Bill is unlikely to become law, but I hope that my right hon. Friend will accept it in the spirit in which it is intended—as a contribution to the discussion and a request from all Members of Parliament, local authorities and others in the area who are concerned that there should be legislation to give control in this respect.

Question put and agreed to.

Bill ordered to be brought in by Mr. Peter Viggers, 34r. Patrick McNair-Wilson, Mr. James Hill, Mr. Peter Lloyd, Mr. Stephen Ross, Mr. R. C. Mitchell, Mr. Robert Adley, Mr. Peter Griffiths, Mr. Anthony Nelson, Sir David Price and Mr. R. Bonner Pink.

FLOATING STRUCTURES (CONTROL)

Mr. Peter Viggers accordingly presented a Bill to enable the Secretary of State to control the stationing of floating structures: And the same was read the First time; and ordered to be read a Second time upon Friday 12 March and to be printed. [Bill 75.

Orders of the Day — Travel Concessions (London) Bill

Order for Second Reading read.

The Secretary of State for Transport (Mr. David Howell): I beg to move, That the Bill be now read a Second time.
I do not think that I need detain the House long in describing the content of this short Bill. It simply gives the Greater London Council the same powers as other authorities have to pay for travel concessions for the elderly and for disabled people. The Transport Act 1968 gave these powers to county and district councils, and they were extended to London boroughs by the Transport (London) Act 1969, but not to the GLC. At the time, concessionary travel was seen as a social service rather than as a transport function, and therefore more appropriately the responsibility of the London boroughs.
Nevertheless, in 1974, the arrangements which had been made by the London boroughs were superseded by a London-wide scheme which was instituted by the GLC. However, following the House of Lords decision in the Bromley case, the GLC told me that it had been advised that it could not use its power to subsidise London Transport to pay for concessionary travel. Although it could have continued travel concessions by using its general power to spend the product of a 2p rate, it chose not to do so, and the London boroughs, which have powers, could not have got a London-wide scheme going in time. By that time, the GLC was making somewhat alarmist and irresponsible statements and causing much anxiety to London's old people.
So I felt it right to act at once. On 14 January, I wrote and told Mr. Livingstone that the Government believed that the tangle over old people's concessionary travel should be cleared up quickly. In order to safeguard the position of elderly and disabled travellers, I said that I would be willing to introduce legislation to bring the GLC's powers to provide for concessionary fares in line with those for other authorities. I have therefore introduced this Bill so that the GLC can continue to pay travel concessions. It will be for the GLC to decide how to use the powers which the Bill confers. I emphasise that there is no question of large additional grants being made to the GLC for this purpose, as was widely and erroneously reported earlier. The Bill simply brings the GLC into line with all other local authorities on the concessionary fares issue.
I should like to set the Bill in its proper context. As the House will recall, I have been pressed strongly to bring forward early legislation to allow a much wider measure of subsidy to London Transport. I have made it clear on a number of occasions that the Government support the payment of a reasonable level of subsidy to maintain essential public transport services. Altogether, nationally, our public expenditure plans provide for £1·2 billion in bus and rail subsidies this year. I have been asked what I regard as "reasonable". I have given my view on that in the transport supplementary grant settlement. My right hon. and learned Friend the Attorney-General has given his

formal opinion that, subject to this legislation on concessionary travel, London Transport's revised budget for 1982 is a legitimate one.
Looking further into the future, I am very concerned to ensure that we have a stable and reasonable financial basis for public transport in London. Although it was questioned at first by some hon. Members, it remains our firm view that this Bill is all that is necessary by way of legislation to sort out the position for the rest of this year. I am now looking at the overall transport position further ahead. For that purpose, I have asked Mr. Livingstone and Sir Peter Masefield to come and meet me. However, I must rule out any return to the sort of massive increase in rate-borne subsidy which the GLC was apparently intending to inflict on Londoners, and for which it has been campaigning.
To embark on the low fares policy without working out how the bill would be paid, and how big it would be, was always bound to lead to worse damage for Londoners, not a better situation. That is what it has done.
It cannot be argued, as some have tried to argue, that London's transport has been without heavy public support. When London Transport was handed over to the GLC originally, the Government of the day wrote off its debt of £270 million. It was hoped that, starting with a clean sheet, it would be able to pay its way. For a time it did so. However, in the mid-1970s, fares were held down for a time when costs were pushing up, and big deficits began to build up. London Transport has been running at a loss ever since.
In 1980, London Transport received over £250 million in grants of various kinds. That represents 50p for every £1 taken in fares. Moreover, ever since it took over responsibility for London Transport, the GLC has pursued a policy of providing London Transport with its capital funds free. So London Transport has not had to meet interest charges on borrowing for capital investment. That itself represents a further quite considerable subsidy.
In its recent publicity campaign, the GLC has totally misrepresented the extent to which London Transport has been subsidised in the past. Mr. Livingstone has said that he would be quite happy if London Transport could be subsidised to the same extent as British Railways' London and south-eastern commuter networks. In fact, the proportion of subsidy has been very comparable. It has been very similar. No one is suggesting—certainly not I—that all was perfect with London Transport before the Labour Party took office in County Hall last May. We know that traffic was falling and costs were increasing far more than the movement in prices generally. Looking back over the 10 years from 1970 to 1980, the number of passengers declined by about 20 per cent. However, the number of staff remained about the same.
In August 1980 Sir Peter Masefield was appointed as chairman and under his leadership London Transport began to make a real start in improving its performance. That was up to May of last year and then came the 25 per cent. fares cut, which was actually a 32 per cent. fares cut. The findings of the courts demonstrated how that decision was taken on a purely political basis and without consideration of the consequences. The damage it did was not just to transfer a major share of the costs from travellers to ratepayers—that was clear enough; it was even worse in many ways. It reversed the progress made under Sir Peter Masefield to improve efficiency and cut costs.
Pushing up indiscriminate subsidies does little to deal with the underlying problems. On the contrary, the knowledge that somebody else will pick up the bill reduces the pressure to be more efficient and cost-effective. On top of that, the GLC insisted that London Transport should run more bus-miles, take on more employees and reopen the busmen's wage settlement to give them a bigger increase.
On indiscriminate subsidies, this is not a narrow or in any way partisan view. The Labour Government's Orange Paper or consultation document of 1976, with a foreword by the late Anthony Crosland, made clear their view. I quote from the paper because it is worth putting it on the record:
indiscriminate subsidies are not an effective way of meeting environmental and social objectives. In practice, general subsidies to fares do not reduce congestion because they attract few car drivers to use buses; fare savings cannot offset the time saving and convenience of using a car.
That was a carefully concluded assessment on the weakness of the argument about indiscriminate subsidies being the answer in circumstances of this sort.

Mr. Tim Eggar: When my hon. Friend listed the extravagances of the present Labour GLC, he omitted to mention that London Transport workers were given £50 to take account of the reduction in the value of their free transport pass. Of course, the same thing was not done for pensioners.

Mr. Howell: My hon. Friend is correct. There are many items which could be added to the list of additional costs imposed on London Transport and the Labour Party's cavalier attitude to costs generally.
When people talk about the burden on the rates, they must remember that the ratepayer has been paying not merely for the low fares policy but for the high cost policy. I should like to make it clear that, like everyone else, I am also in favour of lower fares. It would be odd if one were not in favour of lower rather than higher fares. However, the issue is who pays and who covers the cost. The first consideration must be for the operator to provide services as efficiently and economically as possible and to tailor them to meet demand.
London Transport was beginning to make progress on that aspect until the new regime appeared on the scene. Thereafter, if one first considers the keeping down of costs, which is where the initial gain must come from, there are three sources—the customer, the ratepayer and the taxpayer. That has been the position over a number of years. What happened in London was that, as a result of moves from May onwards last year, the matter got hopelessly out of balance.
The fact is that—and perhaps this was not faced sufficiently squarely—providing public transport is an enormously expensive business and that the GLC's low fares policy was already laying and would have laid enormous burdens on ratepayers.

Mr. Sydney Chapman: rose—

Mr. Howell: I will state the figures and then gladly give way.
Excluding any loss of block grant, it would have cost the GLC £1·2 billion over the next four years over and above the grant that London Transport normally receives. The additional annual support would have risen from about £250 million next year to over £400 million in 1985–86. If the low fares policy had continued next year, the

transport element in the typical London householder's rate bill would have risen tenfold over what it was before Labour took over.

Mr. Chapman: I am grateful to my right hon. Friend, who has made the point I wanted to make—if fares had been reduced and frozen for four years, the cost would have been no less than £1·2 billion. Does he agree that it is totally dishonest of the GLC to pretend that that amount of subsidy could have been afforded either by the ratepayers of London or, indeed, by the taxpayers of the country? Has that anything to do with equity and fairness in our fiscal system? Is it not Mr. Livingstone who ought to be accountable to the people of London for daring to suggest that his cheap fares policy was practicable and could be sustained for four years.

Mr. Howell: My hon. Friend is wholly right. Concentrating only on the low fares side is an utterly misleading and irresponsible way of putting forward the argument when discussing a very serious and important issue—an efficient transport system in London. As my hon. Friend has said, it is all very well for those who do not pay London rates to call for lower fares. One must wk about those who pay rates arid all the jobs that would be lost as a result of soaring rates. In particular, one must be concerned about the pensioners we are dealing with in the Bill.

Mr. Douglas Jay: To put the matter into perspective, is the right hon. Gentleman aware that, according to London Transport figures—not the GLC figures—the cost of the revenue support which would have been necessary under the reduced fares scheme would have amounted, for the individual ratepayer, to rather less than the cost of a gallon of petrol per week?

Mr. Howell: The right hon. Gentleman may have some figures, but the figures I am giving are the precise figures emerging both from London Transport and from GLC estimates of what the system was costing and would cost. The enormous additional increase in the rates was indisputable and, as far as one can comprehend, until the Lords judgment was given which rendered this sort of rating illegal, there was no idea about how such rate levies would be sustained.
Although people may say "What a nice idea low fares are", they must ask, and it is irresponsible not to ask, who pays and wonder about the ratepayers and, particularly, the pensioners.
People already criticise the rating system because a single pensioner must pay the same rates as the next door family with four or five earners. It makes matters worse if, on top of that, the pensioner must also subsidise their cheap fares. There would be very little point in passing this Bill to allow pensioners to enjoy free travel on London Transport—I take it that I shall have the full support of the House for the Bill—if they had to pay for the cheap travel of other people, many of whom do not even live in London.

Mr. W. R. Rees-Davies: I am reluctant to intervene because my right hon. Friend has given way so many times. However, hon. Members who live in the countryside not far from London are literally bombarded with letters and complaints that the pensioners in London get 100 per cent. relief and are able to travel everywhere,


whereas pensioners outside London get little or no relief because the Government cannot afford to give it to them in the countryside.
Have the Government looked at that problem with a view to considering carefully whether a national scheme could be introduced along the lines, for example, of half fares and whether those in London should fall into line with such a scheme? Although recognising that that might have some temporary unpopularity among London pensioners, it would be highly acceptable by pensioners throughout the country who recognise that they are being victimised by London pensioners who get everything whereas they get little or nothing.

Mr. Howell: I am aware of my hon. and learned Friend's concern. It is the Government's view that local authorities should be allowed discretion in how they use the powers to give concessionary fares for pensioners and disabled people that all authorities will have once the Bill is passed, and the GLC is included with all other authorities.
There is a further argument about London Transport to which I would like to address myself. Some say "Never mind about the rates" and argue that there should be some subsidy from the Government, which means the national taxpayer. The question that has to be asked of those who put this suggestion is "Where is the extra money supposed to come from?" Is one supposed to go to taxpayers in Merseyside, Wales or the North and ask them to make additional contributions to the London transport system?
I believe that London deserves special attention as our capital city. As a matter of fact, it gets that special attention. It already absorbs 25 per cent. of the resources that go to local transport and as much as 40 per cent. of the cash that the Government make available through the transport supplementary grant, although it accounts for only 15 per cent. of the population. On that basis alone, London already scoops the pool. It is not fair or reasonable to ask people in the rest of the country to contribute more.
Nevertheless, the first task, following the difficulties of recent months and the morass into which London's transport has been led, has been for the GLC to settle a budget for London Transport that faces financial realities and that gives it the essential basis for its operations this year. This has now been done. As the House will recall, I offered to widen London Transport's borrowing powers in order to give the GLC the option of spreading the burden of last year's deficit, incurred during the low fares experiment, over several years. But the GLC chose not to take it. It has increased the rates to pay off the whole sum next year. I hope that ratepayers will demand a corresponding reduction in the rates the year after.

Mr. Thomas Cox: On the grant that the right hon. Gentleman offered to the GLC, will he say exactly how much interest the GLC would have been called upon to pay over that period? Who was to pay for that interest?

Mr. Howell: Obviously borrowing over time involves a higher interest burden than paying it off all at once. The GLC was faced, after the chaos of the last few months, with paying off the debt. My offer to the GLC was that London Transport should have power to spread the burden instead of an attempt being made to recover it all from the

rates in one year. The GLC was entitled to take the view that it wished to recover it all in one year, but that has inevitably led to a high rate increase as well as a fares rise.
The GLC has blamed the situation on the Lords decision. However, as the hon. Member for Tooting (Mr. Cox) will, I think, fairly recognise, the reverse is the truth. The Lords decision prevented the GLC from imposing a much bigger burden on the ratepayers. The extra cost of continuing with its low fares policy would have nearly trebled the GLC precept this year. It would have cost, as I have already mentioned, an extra £1,200 million over the four years.
I believe, frankly, that the GLC was set on an absolutely impossible course. I hope that, once the GLC leaders have let off steam through their protests about the difficulties in which they have put themselves, they will turn their minds to the future and settle down to the task of getting London Transport back on to a sound footing. That is not to say that no changes are needed. Sir Peter Masefield, among others, has made clear his view that there is a need for change in the present organisation.
Long before the House of Lords judgment, the Transport Select Committee had been concerned about the organisation of transport in London. It has now nearly completed its examination of that subject. I hope to appear before it myself shortly as its final witness. I look forward to seeing its report in the near future. My first priority has been to restore order after the chaos caused by the GLC's irresponsible policies. The existing arrangements have worked in the past. It may be that they can be made to do so again in the future. Organisational changes do not necessarily produce better results on the ground, but I am certainly prepared to consider changes in the present system.
I do not think that the balance of consideration that is required will be helped one iota by a senseless publicity campaign conducted at the ratepayers' expense and the encouraging of pointless action by London Transport staff which will only make matters worse for Londoners. Campaigns and slogans are no substitute for getting down to the job of dealing with the real problems of public transport in London.
I believe that it will be possible to get a better, more efficient and, indeed, a cheaper transport service for Londoners, but that it will be achieved only by looking at both sides of the equation—who pays as well as what is spent. It will not be achieved by the sort of half policy that has been tried out in London in recent months with such disastrous consequences. In the meantime, with the help of this modest Bill, I am proposing that we remove the worry that London pensioners had that they might lose their travel concessions which, I know, they greatly value. I commend the Bill to the House.

Mr. Robert Hughes: One would have thought that, with the passage of time since hon. Members first discussed the issue arising out of the Law Lords decision, the Secretary of State would have come to the House with a little humility. The right hon. Gentleman told us in those early, heady days that talk of pensioners' concessionary travel being in difficulty was wild, alarmist talk. Yet he has had to come to the House today to introduce this Bill to deal with the problem. The


measure must be in line for some sort of record. It is the shortest transport Bill hon. Members have ever seen. I suppose, to that extent, we should be grateful.
As the Secretary of State remarked, the Bill deals with a very small part of the wreckage of the Greater London Council's general transport policy caused by the Lords judgment in the case of Bromley versus the GLC. To the extent that the Bill gives clear powers to the GLC to fund concessionary fares for pensioners, the Opposition accept that it is necessary. We shall not oppose it in the Lobby this evening.
We are greatly disappointed, however, that the Bill fails to deal with the central issue arising from the Law Lords decision. The major effect of that decision is to declare illegal that which was always thought to be legal and to render null and void a public transport fares policy that was pursued in good faith.
It must be stated clearly for the record that the Labour Members of the Greater London Council, in implementing the manifesto commitment "Fares Fair", acted honour-ably, thought they were acting and intended to act within the law. It was not a policy of defiance, nor one of seeking conflict with the Government. It was a well thought out policy on public transport designed for the benefit of the travelling public of London and clearly discussed at the hustings during the GLC elections.
The idea of inexpensive fares for public transport, as part of an overall strategy for city transport, is not novel. As long ago as 1963, in his historic and well-known study "Traffic in Towns", Professor Colin Buchanan concluded that the role of public transport was an important part of the strategy of traffic management in large cities. I wish to quote from the shortened edition of the Buchanan report, published as a Penguin special and called "Traffic in Towns". On pages 240 and 241, Professor Buchanan concluded:
In the long run the best way to keep a 'ceiling' on private car traffic in busy areas is likely to be to provide good, cheap public transport, coupled with the public's understanding of the position. But the attractions of private cars are very great, and there can be no denying the difficulties of providing public transport services so intrinsically convenient that they will attract optional car traffic off the roads in appreciable quantities. But, given a different financial policy, travel by public transport could be made relatively cheap, and this may prove to be the key to the problem in the long-term.
That means that cheap fares, as a deliberate act of policy, are a desirable objective for which to plan. Whatever confusion may remain as to the precise results of the Law Lords decision—there is still a great deal of confusion—it effectively prevents the GLC from pursuing such a policy objective. Lord Scarman said:
loss may have to be accepted as a necessity but it may not be sought as an object of policy".
That is as clear as day.
The concept of cheap fares is not unique to London. There are several comparable international examples of subsidised city transport. For example, New York's public transport enjoys a 72 per cent. subsidy—and public subsidies are anathema in the free enterprise United States. Milan enjoys a 71 per cent. transport subsidy, Brussels 70 per cent., Berlin 61 per cent. and Paris 56 per cent. Even with the GLC's "Fares Fair" policy, the subsidy for London Transport would have been only 46 per cent. After 21 March, that subsidy will be as low as 12 per cent. from all sources.

Mr. Michael Neubert: The hon. Gentleman appears to be quoting from a highly misleading advertisement which is being paid for by the ratepayers of London. Can he explain the difference between the 12 per cent. that he cites and the 23 per cent. which the chairman of London Transport, Sir Peter Masefield, gives as the operating subsidy following the fares increase on 21 March?

Mr. Hughes: The subsidy can be calculated as 22-8 per cent., but the difference between the figures depends on whether one includes concessionary fares.

Mr. David Howell: It is important to get the calculations right. If renewal, depreciation and concessionary fares are included, is not the subsidy nearer 30 per cent.? Has the hon. Gentleman any evidence whether the international comparisons that he is making include concessionary fares, interest-free capital, renewal and depreciation? If not, will he be more careful when freely making comparisons which are often misleading?

Mr. Hughes: The international examples compare like with like. I have checked the figures thoroughly to be sure of them, because I thought that 12 per cent. seemed extremely low. As recently as last evening, I specifically asked for figures to be checked for accuracy. It would do neither my case not the GLC's case any good 1:o quote misleading figures. I wanted to be certain that the comparisons were between like and like. I have a letter from Mr. Bayliss, confirming that that is so.

Mr. D. N. Campbell-Savours: If the Government are challenging the statistics, why do they root publish the right ones? Will the Minister give us the information when he winds up the debate, when he will have the opportunity to give what he believes are the real figures?

Mr. Hughes: The Minister can answer that question when he winds up the debate. I am satisfied that the international comparisons are valid and that we are comparing like with like. If that were not so, my arguments would be weakened.

Mr. Terence Higgins: This is a crucial point. To what extent has the hon. Gentleman allowed for substantial subsidies on, for example, buses and fuel, which are also allowed for the GLC? Has he taken those matters into account in his comparisons with other countries?

Mr. Hughes: Yes. The figure that I have given for London Transport is for subsidy from all sources—from the Government in transport supplementary grant and from rates.
In any event, no one can rationally argue that the 46 per cent. subsidy provided by the "Fares Fair" policy is profligate. As a result of the Law Lords decision, there will be an increase in fares of 100 per cent. and a reduction in services. Reductions in services are taking place, and more will follow. We are dealing not with a hypothetical position, as was the case in late December when the possible results of the Law Lords decision wore postulated, but with realities.

Mr. Neubert: Before the hon. Gentleman leaves that point—

Mr. Hughes: I have not yet developed the point. The hon. Gentleman cannot reasonably intervene on my point about the effects on the London Transport budget for this year until I have made it.
The current London Transport budget plans for the loss of 5,000 jobs over the next two years. The problem is compounded by the GLC's inheritance of a scheduled service of 200 million miles for buses when the running route mileage is only 168 million miles. Hon. Members know—if they do not, they should—that nothing frustrates the travelling public more than a disparity between the published schedules and the buses actually running. Failure to meet schedules devastates the morale of travellers. Those who maintain that that has no knock-on effect into business efficiency do not understand the problem. People arriving late for work, because they have queued for a long time and not been able to catch a bus at the published time, are in no frame of mind to give of their best.
Much has been said in the past two months about the GLC vastly increasing services. The GLC managed to increase the running route mileage to 174-5 million miles. I give it credit for that. The budget reduction will force that figure down to 158 million or 159 million miles by the end of the year. It will be the lowest ever route mileage for London Transport, and it will continue to fall.
The London underground urgently needs capital investment, but that cannot be decided because of the uncertainty as to what reasonable revenue returns on capital spending are acceptable. I take a concrete example. We are no longer in the realm of the hypothetical. The modernisation of Goodge Street station cannot be undertaken, although, by any test, it is necessary. Orders for coach stock must also be reduced. That means a loss of jobs not only for contractors who would have worked on the station modernisation but for coach builders.
As a result of the way in which the Law Lords judgment has to be applied, London Transport is being forced into a downward spiral, to which the Secretary of State referred. Increased fares lead to fewer passengers and a loss of revenue. A loss of revenue compels a reduction in services, so passengers turn to alternative private transport. That process leads to higher fares, a reduction in services, and so we go on. London Transport is now locked into a vicious downward spiral, which apparently no one knows how to end. All this results directly from the Law Lords decision. It is no use the Secretary of State shaking his head. There is even now conflicting legal opinion about the practical level of revenue that the market will bear which will also be within the law.
Two months ago, just after the announcement of the Law Lords decision, the Solicitor-General explained what was happening. He said:
My advice to the House is that he would be a foolish lawyer who sought at this stage to take any hypothetical case or cases and say that that comes within or is outside the guidelines set by their Lordships. Laymen would be even less wise to do the same. We can all be clear on what the judgment decides and what it does not decide. Having got that clear in our minds, the wise course for all of us, including the lawyers, is to give ourselves plenty of time to digest the details of what has been said and how it may be applied to future cases."—[Official Report, 18 December 1981; Vol. 15, c. 542.]
Confusion still reigns supreme two months later—so much so that the Attorney-General took the exceptional

course of giving a legal opinion on the 1982 London Transport budget. In a letter dated 3 February to the Secretary of State for Transport he said:
I have no objection to this Opinion being made available. Whilst it is most unusual for Law Officers' Opinions to be disclosed outside Government, I consider that in view of the present difficult circumstances facing London Transport an exception can be made.
So the Attorney-General, too, believes that there are still legal difficulties facing London Transport.
The need for the Attorney-General's opinion became vital because counsel for the GLC and London Transport Executive advised that to comply with the Lords judgment a further 50 per cent. increase in fares would be required on top of the 100 per cent. increase already approved.
In paragraph 2·2 of his opinion, the Attorney-General said:
The G. L. C. approval of the Revised Budget need not be conditional upon any further increase of fares this year. It has been suggested that the G. L. C. would be in breach of their fiduciary duty to their ratepayers if they allowed expenditure on revenue support to L. T. E. to lead to loss of block grant and did not increase fares beyond the 100 per cent. increase proposed to a level which maximises revenue. I cannot accept this argument.
In paragraph 3, he concluded:
In my opinion the 1982 Revised Budget complies with the House of Lords Judgment and the G. L. C. would not be in breach of their fiduciary duty to the ratepayers if they approved it.
In addition to the Law Lords, the Attorney-General is now laying down the law as well. If the 1982 budget were challenged, however, there is no guarantee that the judges would uphold the opinion of the Attorney-General. Although it might save GLC councillors from surcharge, there is no guarantee that the budget would be held to be legal. The situation is becoming farcical. It is reaching the proportions of a tragi-comic soap opera. I cannot believe that any rational person would disagree that the law must be clarified.
What is the Secretary of State's position? As usual, he is less than generous to the GLC. With characteristic churlishness, he said that the GLC got itself into the mess and that it must get itself out. That is a totally inaccurate representation of the facts. We are in a mess because the courts have put us there. The courts can interpret statutes only on the basis of the wording of the Acts. By tradition, they are debarred from consulting the report of debates in the House. They are therefore prevented from ascertaining Parliament's intention in framing legislation. To laymen, such as myself, that is a constitutional and legal absurdity.
Parliament's intention in placing the Transport (London) Act 1969 on the statute book is well documented and clear beyond peradventure. As many people outside are still not aware of what the argument is about, it is essential to restate the position.
The White Paper of July 1968, "Transport in London", in paragraph 38, states:
The Government believe that urban transport is essentially a local rather than a national matter. Local people should be the best judges of the standard and quality of services they want and are prepared to pay for. In London, the Greater London Council can appropriately take on this major task.
On Second Reading of the Transport (London) Bill, which became the 1969 Act, the then Minister of Transport, now Lord Marsh, said:
The basic purpose of the Bill is to place the main responsibilities for transport in London where, in my view, they belong—with the people of London, through their elected


representatives on the Greater London Council. We aim here to give the Council all the powers that it needs to carry out that job…
A major difficulty of the London Board in the past has been that its two statutory duties—to pay its way and to provide an `adequate' system of passenger transport—are so framed as to be difficult to define and in practice impossible to reconcile. In the Bill, the overriding duty will be the financial one—to break even and to meet financial objectives set for periods fixed by the Council…
These duties are completely interlocking. What they mean in practical terms is that the Council will be able to decide on the broad standards of service to be provided and will have, in return, the responsibility of ensuring, in one way or another, that the London Transport undertaking remains viable. 
That is perfectly clear, but, if anyone were in any doubt, he continued:"
I turn now to the role of the G. L. C. in relation to the Executive. The main powers that the Council will have, apart from the power to appoint, will be to pay grant to the Executive for any purpose it thinks fit and to issue directions to the Executive. This gives the Council the right to prescibe the policy lines to be followed and to take financial responsibility for its decisions. This is very important, because if the Council wishes the Executive to do something that will cause it to fall short of its financial targets, it will itself have to take financial responsibility for it. The Council might wish, for example, the Executive to run a series of services at a loss for social or planning reasons. It might wish to keep fares down at a time when costs are rising and there is no scope for economies. It is free to do so. But it has to bear the cost."—[Official Report,17 December 1968; Vol. 775, c. 1244–48.]
I apologise for the length of the quotation, but it was necessary to show beyond doubt that the intention was to enable the GLC to fix its fare structures and revenue support in the context of policy objectives.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke): The hon. Gentleman seems to support the proposition that the local authority concerned should be able to take on the cost. Does that mean that he would have been content for the GLC's rate precept to rise to treble the 1981–82 level, which would have been the result if cheap fares were continued?

Mr. Hughes: We shall come to the arguments about cost later. At present, I am making it clear that Parliament's intention was that the GLC should decide its policy and that the cost resulting from that would have to be borne by the GLC and the ratepayers. That has been deliberately set aside.
It is interesting to note that the Conservative Opposition at that time, in the presence of the right hon. Lady who is now Prime Minister, raised no objection to that policy being adumbrated and pursued. Yet the Under-Secretary of State now seeks to deny that.
In view of all those facts, there is an overwhelming argument for parliamentary action to restore the law to what everybody believed it to be. The Government certainly believed that the GLC's policy was legal. They did not agree with it and were critical of the cost, but they did not believe that an illegal policy was being pursued. If they had, it would have been improper for the Secretary of State for the Environment to claw back £110 million from the GLC because it had exceeded his spending guidelines.
The right hon. Gentleman cannot have it both ways. If the policy was legal—and the Government thought that it was—they were entitled to claw back, even though I disagree with them. If the Government thought that the policy was illegal, they should have taken the Attorney-General's view and brought a case to the courts to

challenge the legality of the GLC decision. The fact that they did not do so proves conclusively to me that the GLC's policy was considered in all quarters to be within the law.
I fully recognise that the Conservatives, now in Government, have changed their minds. I also recognise that no Parliament can bind any of its successors. It is always open to a Government to reverse the policy of a previous Government by repealing Acts of Parliament. The Government would have been entitled to repeal those sections of the Transport (London) Act 1969 with which they disagreed and to put in their place laws in accordance with their political views. What the Government are not entitled to do is to hide behind the skirts of the Law Lords and impose their policy as a byproduct of the decisions of unelected judges.
I have advanced three reasons why Parliament should act to remedy the position. First, the "Fares Fair" policy is a rational part of an integrated transport policy and an integral part of a transport strategy for a major city. Secondly, the GLC always believed that it was acting within the law and intended to implement its mandate from London's electorate. Thirdly, there still remains legal confusion, and any future transport budget is open to challenge in the courts.
There is a final reason that we would do well to take into account. Those of us who serve our constituents in the House are jealous of our legislative responsibilities. We are proud of our parliamentary democracy. We aver that this mother of Parliaments is a fine example to other parts of the world. We take comfort in an independent judiciary as a defender of individual rights. But, by failing to take action to uphold the will of Parliament when that will was clearly expressed during the passage of the 1969 Act and by failing to remedy judicial injustice, we diminish people's faith in our democratic institutions and the supremacy of Parliament. We do that at our peril.
The right course is to remedy the dificiency in the law exposed by the Law Lords. The Opposition will seek to do that in Committee.

Mr. John Hunt: The hon. Member for Aberdeen, North (Mr. Hughes) told us at the beginning of his speech that the cheap fares policy was discussed in full on the hustings at the Greater London Council elections last May. That may well be true, but if it is true it only emphasises the feeling of many of us that such policies are simply a form of election bribery.
What was not discussed at the hustings with anything like the same emphasis and persistence was the massive increase in rates that would be the consequence of the cheap fares policy. That explains the shock waves that reverberated throughout Greater London when its ratepayers were confronted with the increase of l1·9p for just one half year. Those shock waves were felt throughout London, and were particularly strong in my constituency. Hence the feeling that led directly to the court action that Bromley council, acting on behalf of its ratepayers, so rightly took.
Aberdeen, North is a long way from Bromley. Therefore, the hon. Gentleman cannot be expected to understand the feelings of anger and rage that swept through my constituency and others in Greater London at that time.

Mr. Nigel Spearing: Newham is a little nearer Bromley, and even nearer Bromley-by-Bow. Does the hon. Gentleman agree that if the 11½per cent. increase had covered a "Fares Fair" policy for the whole year many of his constituents and ratepayers might well have thought that to be a reasonable bargain?

Mr. Hunt: I am not prepared to speculate about that. I very much doubt whether even at that lower level the policy would have been acceptable to my constituents, who felt particularly aggrieved because, unlike the hon. Gentleman's constituents, they do not have the London underground service, and therefore are penalised additionally.

Mr. Roger Stott: The hon. Gentleman must surely be aware that the GLC leadership offered to pay British Rail a subsidy of £20 million so that his constituents could enjoy the same facilities as those enjoyed in Greater London. That offer was turned down because the Secretary of State for Transport refused to allow the grant to be made, as it would have been outside British Rail's external financing limit.

Mr. Hunt: I am not familiar with the arguments in that case, and as I am not a Minister I shall leave the answer to my hon. and learned Friend the Under-Secretary.
The hon. Member for Aberdeen, North tried to draw some international comparisons, but interventions by some of my hon. Friends showed that those comparisons were highly misleading, to put it mildly. Did the hon. Gentleman take into account that in a number of countries the subsidies are concentrated on the capital and are not spread to other parts of the country? I think that they are spread in that way here, rather more than in some other European States. That is another factor that the hon. Gentleman should take into account in his calculations if he claims to be comparing like with like.

Mr. Robert Hughes: I was comparing major cities—New York is not a capital city—in a number of countries, not the overall subsidy in each country. I was dealing solely with major cities, including capital cities.

Mr. Hunt: It is only fair to take the level of subsidy in a country as a whole. Otherwise, one is liable to draw misleading conclusions, as the hon. Gentleman did.
The hon. Gentleman said that London Transport was now on a vicious downward spiral. That was not the position nine months ago, when Sir Horace Cutler was in charge of London Transport. Therefore, if it is the position now the responsibility rests with the present Labour administration at county hall.
In opening the debate, my right hon. Friend the Secretary of State conceded that this was a short and modest Bill. It is, but it will reassure the elderly and disabled in Greater London, who might otherwise have been alarmed by the scare stories spread in the House and elsewhere about the possible effect of the Lords judgment on their concessionary fares. The Bill clarifies the law and establishes beyond doubt the GLC's legal authority to provide concessionary fares for the elderly and disabled. To that extent it must be welcome.
One of the most unfair aspects of the "Fares Fair" policy was its impact on the elderly, who, as holders of free bus passes anyway, derived no benefit from the lower fares, but who, as ratepayers, as many of them were, were severely hit by the consequent supplementary rate, which

meant that their money was being used to subsidise the travel of people who were much better off than they were, people not only in London but from other parts of the country and often from overseas—wealthy tourists and others.
The fundamental unfairness of the "Fares Fair" scheme was that it totally destroyed the balance that had been broadly established over the years between the ratepayer on the one hand and the fare payer on the other. Instead, it weighted the balance heavily and unreasonably in favour of the traveller. That was the main burden of the Lords judgment.
It is sometimes forgotten that the supplementary rate of 11·9p that was levied last October reflected only the cost of six months of the scheme. It was, as it were, a mere foretaste of the rate clobberings yet to come if the cheap fares policy had been allowed to continue. Indeed, as hon. Members will recall, the Labour Party's manifesto commitment in London was not just to cut fares by 25 per cent. but then to freeze them for the next four years. As has already been pointed out, that represented an escalating and cumulative commitment to the tune of about £1,200 million and suggested a trebling of the rate burden. The effect of that upon London ratepayers in general and upon commercial ratepayers in particular would have been wholly catastrophic.

Mr. Sydney Bidwell: Would the hon. Gentleman agree that what would have happened on a year on year basis under Labour control of the GLC would have been conditioned by the extent of the increase in the volume of usage of buses and of London Transport as a whole, which might have brought in additional revenue? The patterns of usage had not been determined, so we learnt in the exchange between Sir Peter Masefield and the members of the Select Committee. Surveys were being carried out but have been stopped.

Mr. Hunt: The prospect of rapidly mounting revenue is an illusion; we are told that although the cheap fares policy resulted in an 8 per cent. increase in the number of travellers during its period of implementation, revenue has fallen sharply. That is the experience everywhere. There is not a great increase, or any increase at all, in revenue.
As I said, the cheap fares policy implemented over a period of five years would have led to a cumulative and crippling burden upon London's ratepayers. Mr. Livingstone should be grateful to their Lordships for having spared him the wrath of London ratepayers, which would otherwise surely have descended upon him if his five-year programme had been fully implemented.
Mr. Livingston and his friends are seeking to extract maximum political advantage from the 100 per cent. increase in London Transport fares, to be implemented next month. We must emphasise that responsibility for the sheer size of the increase rests not with the Government, not with the Law Lords, and not even with Bromley borough council, but fully and firmly with Mr. Livingstone. If he had simply followed the policy of the previous Conservative Administration fares would have stayed at a reasonable and sensible level and London's ratepayers would not have been presented with a massive bill this year, involving a 90 per cent. increase, to pay for the extravagance and incompetence of county hall over the past nine months.
It is important to realise that the 100 per cent. fares increase which is about to be implemented is not just to


take London fares back to the 1980 level. It is also designed to meet the deficit of over £100 million that has arisen directly from the operation of the cheap fares policy. That is again an answer to the hon. Member for Ealing, Southall (Mr. Bidwell). I would remind him that although there has been an 8 per cent. increase in the number of passengers, total revenue is down substantially, and the deficit has to be met from the rates.
Further, we have been reminded in the debate that immediately Mr. Livingstone came into power he overturned a wage settlement that had been agreed for bus drivers. Instead of the agreed 8 per cent. he promptly gave them 11 per cent. Then he took on more staff. Finally, as my hon. Friend the Member for Enfield, North (Mr. Eggar) reminded us in an intervention, there was a decision that comes straight out of "Alice in Wonderland" when he gave all London Transport workers £50 per head to compensate them for the lower value of the concessionary fares under the "Fares Fair" system. This is the kind of Marxist Mad Hatter that we have at county hall.
I note that last weekend Mr. Livingstone described as imaginative a decision by some London Transport staff not to collect the higher fares. That again demonstrates this man's contempt both for the law and for the ratepayers. If there is a shortfall in London Transport revenue as a result of the action of London Transport staff, I hope the district auditor will think carefully and perhaps surcharge Mr. Livingstone personally for the money of which London Transport has been deprived.

Mr. Frank Dobson: Is the hon. Gentleman seriously suggesting that it is some form of lunatic Marxism to recruit 105 bus drivers, 161 bus engineers, 111 trainees, 39 train men, 56 tube engineers and 72 railway policemen? Those were the people recruited as a result of the change in policy. Is the hon. Gentleman suggesting that that is lunatic Marxism or does he recognise that all those recruited are at the sharp end of the business to provide a better service for London?

Mr. Hunt: I maintain that at a time of great financial stringency it was irresponsible, so soon after coming into office, to recruit staff before any assessment had been made of the necessity for such recruitment. This is another indication of the spendthrift way in which Mr. Livingstone conducts our capital's affairs.

Mr. Harry Greenway: Is not Mr. Livingstone in danger of inciting London Transport employees to take action that would lead them down an illegal path? Is that not a disgraceful act? How would Mr. Livingstone react if London ratepayers were encouraged not to pay their rates to finance the appalling expenditure that he has in mind?

Mr. Hunt: I agree entirely with the point my hon. Friend has made. Not for the first time Mr. Livingstone is embarking on a dangerous course in inciting London Transport staff to defy the law. To that extent I hope he will have second thoughts and revise the advice he has given.
In regard to the activities of county hall, in the context of this debate £250,000 is being spent on a newspaper advertisement campaign. As hon. Members will have noticed, the advertisement contains a small coupon which has to be filled in and returned to Members of Parliament. I understand that a number of these are arriving in hon.
Members' postbags. I have received one or two myself. I always regard such campaigns as lobbies for the unthinking man. All that they require is a pen and a pair of scissors. The demands on one's literacy and intelligence are minimal. The wording of the coupon calls upon the Government
to take immediate action to enable the GLC to maintain its present low fares policy without any reduction in services.
It does not suggest how such artificially low fares are to be paid for. I am responding to all the signatories on the coupons and challenging them to clarify their position
My right hon. and hon. Friends are not opposed to a sensible level of subsidy. We return to the all-important balance between the ratepayer and the fare payer. My tight hon. Friend the Secretary of State said:
Resources must be used to keep essential services going and to cater for real needs. They should not be dissipated in indiscriminate low fare subsidies adopted for political reason.
I suggest that that is the real message to come from this debate. It is the lesson of the past six turbulent months in the life of London Transport

Mr. Douglas Jay: Conservative Members seem unable to treat this serious issue as anything more than a petty party political and almost juvenile squabble. The hon. Member for Ravensbourne (Mr. Hunt) said that he was riot familiar with some aspects of the problem. The Minister's speech was even more deplorable. The right hon. Gentleman quoted Sir Peter Masefield three or four times, but did not tell the House that Sir Peter believes that the law should be amended drastically. The right hon. Gentleman several times said that chaos has been produced, but he failed to add that that chaos was produced by the Law Lords judgment. Whether we think that the judgment was right or wrong, it is clear that, as a matter of history, their judgment caused the present chaos.
The Secretary of State said that we must see this issue in its larger perspective. That is what I should like to do. Since we last debated the problem, a new factor has arisen—a decision by another judge in another court on the issue of fares on Merseyside. Only a week ago Mr. Justice Woolf decided that Merseyside, under the 1968 Act as opposed to the 1969 Act, is not restricted in the way that London is. Whatever the Law Lords judgment meant—to illustrate the chaos, London Transport's chief legal adviser and the GLC's chief legal adviser disagree about what the judgment means—it is clear that the Law Lords said that, under the 1969 Act, the GLC is not entitled deliberately to budget for a major deficit.
Mr. Justice Woolf has decided that that restriction does not apply to Merseyside under the 1968 Act. There is therefore clear discrimination against London. The outside transport authorities, which are covered by the 1968. Act, are not limited and are, in effect, left to decide for themselves what they think is the appropriate level of subsidy.
In a letter to my hon. Friend the Member for Newham, South (Mr. Spearing) on 15 February 1982, the Under-Secretary of State for Transport gave the figures for the subsidies now being paid in some of the cities outside London. In Greater Manchester only 47 per cent. of the total cost is covered by revenue. As these are the Minister's figures, I presume that he has made a proper allowance for depreciation, for example. In Tyne and


Wear—this relates to railway authorities—only 43 per cent. of the cost is covered by fares revenue. On Merseyside, in Manchester, in Tyne and Wear, and probably in other cities for which we do not have figures, subsidies of about 50 per cent. are being paid and the authorities are not restricted as is the GLC in London.
There is no rhyme, reason or logic in the present situation. When Parliament enacted the 1968 and 1969 Acts I do not think that any Back Bencher or Minister intended that subsidies should be permitted outside London that are not permitted in London. As the Minister said, a transport support grant is paid to a number of authorities throughout the country. Further, British Rail's services are subsidised. The commuters from Bromley have a subsidised railway service from Bromley, South to Victoria every day, as well as a number of bus services that are subsidised by London Transport. As part of the arguments. they should remember that.
The Minister cannot deny that the law is in a completely confused state and that it must be clarified. If he thinks that only Marxists and Mad Hatters are arguing for clarification of the law, I refer him to an article by the legal correspondent of the Financial Times—he is probably neither a Marxist nor a Mad Hatter—that appeared on Monday. He refers to the decision of Mr. Justice Woolf in the Merseyside case and proceeds to argue that the law is now in a state of muddle and confusion and should be clarified. I shall quote only two sentences from his article. After examining the 1968 and 1969 Acts, he says that it is not clear to him whether they were intended to have a different effect. He wrote:
One suspects that two parliamentary draftsmen used different language to achieve the same legislative purpose.
Unfortunately, they failed to achieve it. He added:
Mr. Justice Woolf, by his forthright decision, has put the transport issue back on to the legal stage, when most politicians, at both central and local level, had thought that the law had uttered its last word. Confusion about transport policy has been worse confounded. Or are the courts going to reverse their attitude, so as to confound us all?
Whatever we think is the right policy and whatever we think of the Law Lords judgment, there is no doubt that London is being treated in a different and worse way from the rest of the country and that nobody knows what the law is. In the circumstances, it is the Minister's duty to legislate, and at present he is not carrying out his job.

Mr. Kenneth Clarke: The right hon. Gentleman appears to have overlooked the decision that affected the West Midlands county council, which had an irresponsible cheap fares policy quashed by the courts because it was adopted on entirely political grounds and did not pay adequate regard to the ratepayers' interests. It is well-established, old law, and the West Midlands county council fell foul of it 20 years ago. It is not the case that the law applies only to London. Yet that has been the foundation of the right hon. Gentleman's speech.

Mr. Jay: If the hon. and learned Gentleman is right and yet another decision has been reached in the West Midlands, that shows how much the law is in need of clarification.

5 pm

Mr. Terence Higgins: We have heard two remarkable speeches—one from the hon. Member for

Aberdeen, North (Mr. Hughes), which was to some extent echoed by the other from the right hon. Member for Battersea, North (Mr. Jay). They said that the law should be what Ministers say in this place instead of the legislation we consider. There is a crucial distinction.
The Law Lords decision is eminently reasonable in terms of economics. They said that there is a crucial distinction between trying to make a profit, or to break even, and subsidising the authority concerned if it fails to achieve that objective, and subsidising transport from the beginning. I believe that the first proposition is right.

Mr. Jay: If the right hon. Gentleman believes that, why should it apply to London and not to Merseyside?

Mr. Higgins: I do not want to go into that now. I stress that the first proposition is the right one. One should start by trying to break even, or to make a profit. If one does not do that, the effect on efficiency will be serious.
We need only consider London after Mr. Livingstone adopted his policy of subsidising transport to see what happens to efficiency. Labour costs were massively increased because he reopened the way to negotiation. It was absurd that a £50 bonus was paid to the employees of London Transport, apparently to compensate for the reduction in the value of their concessionary fares—although it has also been suggested that the payment was to compensate for the higher rates needed to cover the subsidy. Whichever is true, it would be interesting to hear whether that bonus has been clawed back now that the situation has been reversed. That is not an irrelevant question. The people of London are entitled to know.
The hon. Memnber for Aberdeen, North referred to international comparisons. Again, one must take into account whether the authorities concerned are trying to be efficient. Given that some authorities are adopting a policy of widespread subsidy, it is not surprising that they are paying out more than London to subsidise transport. In any case, I believe profoundly that the figures that he quoted are wrong. He has not taken into account the substantial subsidies given to bus operators in many different ways—for example, on the capital cost of buses, fuel costs, and so on. I cannot believe that the figure of 12 per cent. takes that fully into account. However, the fact that other countries adopt a policy which results in inefficiency is no reason for Britain, and particularly London, to do the same.
It has been suggested that we should consider the issue on a national basis. My hon. and learned Friend the Under-Secretary of State knows that on a number of occasions I have referred to the gross unfairness, which to some extent will be perpetuated by the Bill, between London constituencies and constituencies, such as mine in Worthing, which have elderly populations. London can heavily subsidise fares for pensioners because it has a large ratepaying base and can spread the cost over many people who are in employment. That is not possible for constituencies such as Worthing where pensioners pay rates and subsidise their own fares.
In that context it is important to highlight the point in the Bill dealing with the rate support grant. The GLC can spread the cost over its ratepayers and it receives a grant as a result of that, whereas a local authority such as Worthing which cannot do that does not have the benefit of the rate support grant. It is a case of
Unto every one that hath shall be given.


It is a substantial issue.
In a broader context, it is high time that we examined the whole question of concessionary bus fares because pensioners in London are in a privileged position compared with pensioners in other areas with high percentages of elderly people. The issue is difficult because if the cost is not to be massively increased concessions in London will have to be radically reduced. I therefore have some doubts about the Bill's provisions.
As my right hon. Friend said, we must take into account not only the effect on fares but the effect on the ratepayers. If we adopt the policy that Mr. Livingstone and others have advocated, there is not the slightest doubt that a massive cost will be involved in the next three or four years and that the effect on the ratepayer will be very serious indeed.
Not only the domestic ratepayer but the industrial ratepayer, who is deprived of a vote on the issue, will suffer. A massive burden will fall on the industrial ratepayer who is totally disfranchised. The tendency will be for industrialists, commercial operators and others to vote with their feet. There is a danger that as a result of the policy advocated by Mr. Livingstone, which I am happy to say the Secretary of State is not prepared to endorse, what the Americans describe as the "doughnut effect" will occur in London inner city areas are denuded of population, except for the low income groups, and of industry and commerce. That would be a dangerous tendency.
My right hon. Friend's overall objective is right. The decision by the Law Lords makes a crucial distinction between trying to break even and subsidising only if that fails, and providing subsidy anyway. If the second policy is adopted, the effects will be serious.
The issue goes wider than the way that it affects London itself. We must consider carefully whether the close relationship between London Transport and the GLC is right and whether the responsibilities of the GLC for London Transport should be perpetuated. If the transport responsibilities were removed from the GLC we should consider whether we have any need for the GLC at all. There is a growing feeling in the country that it is unnecessary. There is certainly a growing feeling in London that the duties that the GLC performs could be delegated to local authorities below the GLC level or transferred to central Government.
The Bill raises many major issues. I understand why my right hon. Friend is anxious to allay the fears of pensioners, but we must look at the issue in a broad context. I hope that when the immediate problem is overcome my right hon. Friend will turn his mind to the broader problem.

Mr. Nigel Spearing: The right hon. Member for Worthing (Mr. Higgins) rightly draws our attention to the apparent unfairness in a town such as his where it is virtually impossible for pensioners to have some of the concessions that we can, and willingly, provide in London. He may be right in suggesting that we should move towards a national policy. To that extent, he is expressing the concern that Opposition Members have always expressed.
I recall that 10 years ago some London boroughs were able to provide concessions to pensioners and others were not. Labour Members advocated such a scheme and the

GLC, which the right hon. Gentleman unwisely derides, produced the 1974 scheme to which the Minister referred. It was a matter of contention in the 1978 GLC elections. Sir Horace Cutler got into some difficulties on that issue and had to say that he had no policy for changing the pensioners' concessions. Therefore, it is perhaps ironic, and with some mixed feelings, that a Conservative Government have introduced a Bill to give travel concessions to pensioners in London.
I wish to comment on some of the points raised by the hon. Member for Ravensbourne (Mr. Hunt), whose speech I followed with great interest particularly in view of the source. However, he got one or two things slightly wrong. First, there is the cost to the ratepayers. We all agree that rates are an unfair and regressive system, but no one has invented a better one, although there have been Green Papers and investigations. The Secretary of State has put a penal tax on top of certain forms of expenditure, and the supplementary rate imposed on London ratepayers was twice what it need have been. As everyone knows, £61 million of supplementary rate for fares resulted in a £228 million supplementary rate, including £48 million on the previous year's deficit, from which the Secretary of State clawed back £111 million. Therefore, when I intervened during the hon. Gentleman's interesting speech and asked whether the ratepayers of Bromley would have settled for 11½per cent. for the whole year—he was not very sure about that—that was not just a hypothetical situation because without the Secretary of State's clawback that would have been the situation today. We would have got twice as much for ratepayers' money.
The ratepayers of Bromley will not be pleased on 21 March, because even Sir Horace Cutler's flat fare of 20p, in the pre-Livingstone era, will increase to 40p for short journeys and 60p for two or three zones. London Transport fares will increase from 20p to 40p for one zone; 30p to 60p for two zones; and 40p to 80p maximum for three zones. When Bromley ratepayers jump on a bus to travel for a relatively short distance and are asked for a 60p fare—as will happen all over London on 21 March—they may have second thoughts about that 11½per cent. offer.
The Secretary of State for Transport talked about the rates. I recall a speech on 18 December by my hon. Friend the Member for Blackburn (Mr. Straw) in which an accusation relating to rates was made. That accusation has not been refuted. My hon. Friend said that rates for business and commercial organisations could be offset against corporation tax—if it is not already docked—or, if there is a loss, it can be claimed as a tax loss. The Government, the Secretary of State for Transport and the Treasury have never denied what my hon. Friend has said. Therefore, while there may have been an 11½per cent. burden on the business and industrial ratepayers of London for an annual "Fares Fair" programme, which I concede forms a considerable proportion of the whole, the costs could have been passed. That would have been the type of magic formula that everyone in London has wanted.
Many constituents of Conservative Members have been asking for tax-free allowances for fares. That would have been the way to do it. It would have been introduced by the GLC, but that has been destroyed, not just by the House of Lords but by the clawback provisions of the Secretary of State.

Mr. Greenway: When the hon. Member referred to companies being able to write off sums as a tax loss, he


seemed to imply that that meant some sort of recoupment of money to them. Does he not realise that they gain no money from the tax loss?

Mr. Spearing: I am subject to correction, but on 18 December my hon. Friend the Member for Blackburn made a statement that has not yet been questioned by any reputable source—that half the increases in the rates for commercial and industrial enterprises could be recouped either by claims against corporation tax or tax loss. If that is so—it has not been disputed—and bearing in mind the Secretary of State's clawback, those industral and commercial enterprises need have paid only a quarter of their present rate increase to get all the benefits of lower fares for their employees and customers. That is an important principle.
We must get this matter into perspective. These fares are not particularly low in real terms. It has been said time and again—and Sir Peter Masefield has confirmed it—that under the so-called lower fares scheme the people of London are in real terms paying the same fares as they paid in 1969. In fact, we do not operate a lower fares policy, at least on an international standard.
I have already made the point about balance, but it is important. I have already shown that the balance between the transport user and the payer of rates need not be out of line. I think that the earlier part of my speech demonstrated that one is related to clawback and the other to industry.
The other essential balance is the difference between the cost of private and public transport in London. If London is to operate efficiently, there must be not only an efficient transport system, but one whose costs are reasonable compared with the alternative of private transport. There is no doubt about that principle. It is acknowledged across the Floor of the House and even by the Government, who have a concern for the efficiency and economy of London, which is important to the economy of Britain.
At present the cost of public transport per mile is about 6p. On 21 March, it will go up to 12p per route mile, roughly half what it costs to run a car, at least compared with the Civil Service allowance or what is allowed to hon. Members. That means that two people travelling in a car can do so for roughly the same price as travelling by public transport. That is a wrong balance. Four people can do it at half the cost. That is what will happen on 21 March, even if fares do not increase again because of the fiduciary duty later in the year. There will be some pretty horrific bus fares.
The hon. Member for Ravensbourne seems to forget that many people in Bromley travel by bus because there are no tube facilities. Many of them travel by bus to Bromley South to connect with British Rail. On 21 March, the 10p fare will go up to 20p. The fare for one zone will rise from 20p to 40p, and from 30p to 60p across two zones. There will be shock in London, because people will suddenly be asked to pay 60p fares. It will be a high cost for relatively short distances.
That 60p fare will operate across two zones only. The zones will remain. It is a great deal of money for what will be short journeys. If the cost of bus fares for short journeys, which will rise astronomically, is added to the doubling of tube fares, we shall get some extraordinary

results. As everybody knows, sometimes the quickest and most convenient way in London is to take a dog-leg route—a bus to the tube station and then a tube into the centre of London.
There is an estate at Beckton in my constituency which the Secretary of State is to visit on Friday, called the Beckton Parkside estate. It will cost £3.60 return from that estate to Westminster after 21 March. It will be £2.80 on the train and 40p each way on the bus. That estate is only eight miles from here—eight miles as the crow flies or 8½to nine miles as the car travels. That means that the cost will be 22p per person per mile on public transport. That is what London will have to face at the end of next month. It will be serious because many journeys are not in a direct line. They often involve a bus and a train or a tube. The public transport system consists of the best co-ordination of the two.
The hon. Member for Ealing, North (Mr. Greenway) is no doubt waiting to catch your eye, Mr. Deputy Speaker. It will cost £2·80 return from Westminster to Ealing, North, and if there is a 20p bus ride at each end it will cost £3·20 to get to Westminster from Ealing, North or Perivale. The Secretary of State for Social Services is not here, but from Buckhurst Hill a return ticket to Westminster will cost £4·40 on the train, let alone any other costs. The return fare to Hendon Central will be about £2·80. Perhaps the Prime Minister had better bear that in mind when she replies to some of her enraged constituents. The hon. Member for Ilford, South (Mr. Thorne) is present. A return ticket from Redbridge to Westminster will cost £2·80.
This level of cost will not be sustainable. Conservative Members who represent London constituencies will find that. We shall have to search for new solutions, because on top of these swingeing increases there will be cuts in services. It will not be so easy to get a bus or a train. London Transport have a budget package. It reported to the GLC—I have no reason to believe that these measures have been changed, and, if they have been, no doubt I shall be told in the Government's reply—that scheduled bus mileage will be reduced by 20 per cent. by 1984, with a loss of about a third of all bus traffic. Admittedly that will not be sudden, but that is what is in the package.
There will be more one-man buses. That sounds efficient, but everybody knows that past a certain point it is not, because of slowness, bunching and delays to other traffic. Train mileages will be reduced, with a 20 per cent. loss in underground traffic. Employment in London Transport will be reduced in a controlled manner by 5,000 by 1984. That is 5,000 fewer jobs. Therefore, this package is not sustainable, even without taking into account the other side of the equation relating to the congestion and the increased use of motor cars that will undoubtedly occur.
One cannot predict the level of congestion with certainty, but I hope that the Secretary of State for Transport will be careful about taking surveys on congestion in March and then again in April, because there will be a good deal of difference. If he is searching for a way out, as I believe he is, the social costs of such congestion ought to be added to the equation. His predecessor, the late Ernest Marples, used cost benefit analysis in the construction of the Victoria line. It has always been important under previous Conservative Governments, and it should be taken note of in the light of present problems.
The Secretary of State for Transport said that he would be meeting Sir Peter Masefield shortly, and that he would be looking at the proceedings of the Select Committee on Transport that has been examining this important and complex matter of travel in London. If he does not do so, or does not go ahead with the scheme, the wishes of the House will not be fulfilled.
On 18 December when we first debated the matter, the House passed without dissent the motion moved by the hon. Member for Romford (Mr. Neubert), which asked the
Government to give high priority to the co-ordinated development and improvement of facilities for travel, whether by road, rail, sea, air, river or canal, in the capital city … "—[Official Report, 18 December 1981; Vol. 15, c. 532.]
The words
"development and improvement of facilities"
include costs, frequency and reliability.
There is an alternative to the package which the courts have imposed on the GLC. As we said some months ago and the Government realised, there must be another answer. I hope that the Secretary of State will find it, by legislation or by some other means, before 21 March because the package before us will be disastrous for and to the detriment of our capital city.

Mr. Peter Bottomley: I am sorry that the hon. Member for Newham, South (Mr. Spearing) did not provide more balance in his interesting speech by telling us what the rate burden for the six months in which the "Fares Fair" policy was supposed to apply would have been for the average householder in his constituency. Clearly, some of the impact of doubling fares in March will be rather different to what it would have been if it had been possible to go into the changes in fares in London on a rather more rational basis. Sadly they were reduced and, even more sadly they will be increased.
Even taking simple doubling, and the figure that the hon. Gentleman used of £3·60 a time, one ought to start asking what proportion of his constituents come into the centre of London each day, or each week, and what is the average cost to them. It is in part a question of balancing the extra cost of reduced fares against the extra social costs of having high fares.
I find that the debate so far highly disappointing. As the right hon. Gentleman for Battersea, North (Mr. Jay) is not here at the moment I shall not spend too much time on the points that he made. However, in an intervention in the speech of the Secretary of State, he said that the £1·67 per week was the cost per household. That is not the alternative cost to the high subsidy plan of London Transport and the GLC. The actual cost is the total cost, and just putting the rate burden on households is a distortion. It is vitally important to examine not only the rate burden on non-domestic ratepayers, such as industry, commerce and public service premises but the cost to the taxpayer.
The hon. Member for Newham, South was a little disingenuous. The point that he may have been making was that the more one can shift the cost on to taxes the better. That might have been implicit in what he was thinking but it did not come out that way. What he was saying is that the cost to the ratepayers, whether commercial or domestic, could be reduced by loading more and more rates on industrial and commercial

premises—or those in the private side of business—who would then find that they might be able to offset the cost of their rates against their tax bill.

Mr. Spearing: I apologise if I did not put the point as well as I could have. The point I was making was that cries of "unfair on the ratepayer" are exaggerated because the domestic ratepayer can get double the value for money but for the clawback, and commercial and industrial ratepayers, if my hon. Friend the Member for Blackburn (Mr. Straw) is right, would get four times the value For money if the Secretary of State allowed the scheme to go ahead as designed.

Mr. Bottomley: That confirms my interpretation of what the hon. Gentleman said, which is that he is leaving it to the GLC to be able to impose extra costs on the taxpayer. Put so simply, it brings up the question: is it right for the GLC to have that power? I conclude, from what the hon. Gentleman said and from what the GLC was trying to do if it had that aim in mind, that my right hon. Friend the Secretary of State for the Environment is right to have the clawback provisions. If not, there would be a cascading torrent of local authorities trying to put more and more burdens on the taxpayer and saying to the ratepayers "Do not worry about marginally or mightily increased rates. We are managing by increasing the rates for industry to get four times the benefit from the central taxpayer". That is the only conclusion that follows from what the hon. Member for Newham, South said.
I welcome the Bill. The central issue of the debate is that the GLC has tried to put up a sort of Concorde development in public transport. The cost of developing Concorde over four years has been estimated at £1,200 million. I do not believe that, during the GLC campaign, the people of London looked any further forward than to the probable cost to the domestic ratepayer of what is called "Fares Fair" during its first six months of operation. Like the hon. Member for Newham, South, I believe that more investment in public transport facilities is essential. It is much more important to provide subsidies and to take account of social costs on the capital investment side than on the current side. I much prefer to see investment in something that will produce easier travel than to subsidise current costs.
A problem of the current GLC is that, wherever it sees a problem, it throws money at it. It does not stop to count the cost, as has become clear from the House of Lords judgment. If there is a job problem, it provides money. If there is a housing problem, it provides money. If there is an education problem, it provides money. If there is a transport problem, it provides money. It provides money so soon and so quickly that the poor ratepayer stands back and asks "What on earth is happening?" Perhaps the House will remember the enormous outcry from the ordinary ratepayers when the GLC supplementary rate demand came, putting enormous pressure on hon. Members such as myself to ask the Government to take powers to block rate increases. My response to most ratepayers was to say that the consequence of the GLC election was to bring into power at county hall those who would spend ever-increasing amounts of the ratepayers' money in ways of which most of them would not approve.
My response has been borne out by the disgraceful GLC campaign, on which it spent £250,000 of ratepayers' money, in publishing the photographs of 92 London
Members and a coupon, saying "Send this in". The average cost for each constituency is about £2,700. So far 16 coupons have been sent to me. It may be that not all the money has been spent and that some are still in the post. Some people may have put a second class stamp on the envelope. Some people—I know about such campaigns—will not bother to put a stamp on the envelope at all and the cost will be double to me. To spend £250,000 of ratepayers' money on such a campaign is disgraceful and shocking. I hope to hear it condemned by the Opposition Front Bench this evening.
I return to the £1,200 million that the GLC's proposals would have cost over four years. What would the cost of that have been to domestic ratepayers? More importantly, what would the impact have been on capital available to London Transport for investment? It is perfectly plain that investment in London Transport would have been cut, provision of facilities would have been reduced and, in the end, the GLC and the Labour Party in the House would have come to the same conclusion that they came to when previously in Government—that it is wrong to have an indiscriminate subsidy for transport.
I believed that the hon. Member for Newham, South and the right hon. Member for Battersea, North would have put forward the argument that the extra subsidy would come from the rich and go to the poor. It is rather curious that neither of the hon. Members from London, nor the hon. Member for Aberdeen, North (Mr. Hughes), who opened the debate for the Labour Party, put forward that argument. Presumably it is not because they have not thought of it. The immediate assumption should be that, unless proved otherwise, the distribution effects of high subsidies on current costs did not turn out to help the poor at the expense of the rich. It was a random transfer of resources between the people in London, with the exception of the subsidy going to people who live and pay their rates outside London. The point has been made about the general subsidy to visitors to London from outside Britain.
It is important for my right hon. Friend the Secretary of State for Transport to have discussions with the relevant authorities about what would be sensible. I am sorry that the GLC did not have proper consultations with him before it brought in the 32 per cent. reduction in fares last year. It is clear now that the GLC had no intention of thinking seriously about the interests of the ratepayers when it brought in the massive subsidy. It is clear that it did not consider its duty to the ratepayers and the effect of its policies on London in the long term.
We were told at the beginning of the debate that the main thrust of the increased subsidy proposal was to switch people from cars to public transport. Again, we have not heard an estimate from anyone who has spoken so far about the number of people who have switched from private cars to public transport. The figures for the past month would not have been good because more and more people got into the habit of coming into London by car during the British Rail dispute. Even if one considers the earlier months of the experiment, has any hon. Member come forward to say that 2 per cent., 3 per cent., or 5 per cent. of car users have switched to public transport?

Mr. Thomas Cox: Will the hon. Gentleman give way?

Mr. Bottomley: If the hon. Member for Tooting (Mr. Cox) can give me those figures, I shall be happy to give way to him, but I do not believe that he can find them in time.

Mr. Cox: I have a document supplied to me by the Greater London Council and I read the relevant paragraph:
Some 2 per cent. reported increased use of bus or underground due to the fares decrease having previously used their car—half of these involved work trips.

Mr. Bottomley: I am grateful to the hon. Gentleman. Is he saying that the number of people using their cars went down by 2 per cent. in London as a whole during the experiment? Is that the only interpretation that can be put on those words? That cannot be so. Most of the increased use of London Transport during the experiment was by people who were not using public transport at all. As with the hon. Member for Newham, South they may have switched from bicycle to bus or, as with the right hon. Member for Battersea, North, they may have switched from foot to bus. I do not believe that those who would otherwise have made the journey by car have switched to public transport appreciably.
It is clearly desirable to bring down the marginal cost of public transport as far as possible. It is also desirable to have the price as low as is reasonable. In order to achieve that, London Transport must have more part-time employees to deal with the problems of two transport peaks during the day that cannot be encompassed within an eight hour shift. We must also ensure that the marginal cost of the alternative—private motoring—is increased. We should be taking more steps to make sure that the marginal cost of motoring is higher than using public transport.
I am prepared to take stick from constituents and others. We have missed opportunities during this Government and previous Governments to reduce the road fund licence and put it on to petrol. During the past two or three months the cost of petrol has come down substantially to the level that it was last year before the Chancellor of the Exchequer put an extra 20p on a gallon. That is undesirable for the balance between public and private transport. That is not a justification for subsidies of £1,200 million from ratepayers.
I want the House to know that I disapprove of letting the Greater London Council have the power to pre-empt money from taxpayers. I also want the House to know that I believe that the clawback arrangements are right because otherwise too many local councils would try to provide improved services at the taxpayers' expense without the general approval of the House and of the Treasury.

Mr. Robert Hughes: Where did the hon. Gentleman get his figure of £1·2 billion?

Mr. Bottomley: By extrapolation of the costs at the moment and adding on a reasonable degree of inflation.
Perhaps my estimate of inflation for London Transport costs will be wrong. Last year the GLC decided to raise the settlement for bus employees from 8 per cent. to 11 per cent. Most of the estimates that most people would reasonably make about pay increases may turn out to be totally incorrect. I shall leave that point.

Mr. Hughes: Will the hon. Gentleman give way?

Mr. Bottomley: I am sure that the Minister will be happy to give way when he winds up. Up to now my figure of £1,200 million has not been challenged.

Mr. Hughes: rose—

Mr. Bottomley: Does the hon. Gentleman want to challenge it? Will he give an estimate of what the total costs would be and the average costs would be to the London domestic ratepayer over four years?

Mr. Hughes: The net rate effect as from 1 October was £228.3 million, which is the figure that the hon. Gentleman has extrapolated, multiplied by four with 12 per cent. added for inflation. From that figure the hon. Gentleman must take off the £48.2 million deficit from the previous year and from the £111 million rate clawback he must take off the £65 million that the Secretary of State for the Environment restored. The figure then comes down to £115 million as the net rate effect. If that is multiplied by four, it is about £600 million. Even with this Government's inflation rate the hon. Gentleman cannot make up the figure to £1.2 billion.

Mr. Bottomley: The hon. Gentleman has made a big mistake, partly for the obvious reason that he was not present when I made the point originally. I approve of the clawback arrangements because our responsiblity as London Members is not just to ratepayers, but to taxpayers. To take account of clawback is disingenuous. It is the sort of naivety that the House would not expect from the hon. Gentleman.
I hope that the consequences of the experience of the last six months with London fares and transport will lead to the abolition of the GLC as we know it. The decisions taken by the GLC on transport and in education would not have been taken if the responsibilities discharged by the GLC were carried through a co-ordinated approach of London boroughs.
For example, if the London Boroughs Association had had a transport committee, the people taking decisions on transport would have been those who are influenced by the interests of ratepayers in other services and who were seeking to keep their rates as low as possible. Whatever future arrangements are made for national subsidies and transport planning, it is important to make sure that the separately elected GLC is done away with.
It is vital that we move to a system that is more likely to produce common sense than the present system and that we do not get open-ended commitments to subsidies that would ruin London Transport. I hope that we have seen the end of political posturing by the present GLC Administration, which is spending £250,000 in trying to run a campaign against the interests not only of ratepayers but of the people who use London Transport.

Mr. Ronald W. Brown: I support the hon. Member for Woolwich, West (Mr. Bottomley) in his assessment of the GLC, because it is outmoded. However, I still hold the same view as I held in 1962 and 1963. The hon. Gentleman and his hon. Friends have changed their opinion. I have often said that their view was wrong. I welcome the fact that they have now come round to my view.
The hon. Gentleman argued about the £1.2 billion that would be wasted on the cheap fares policy. The exercise upon which he and his colleagues have been engaged since 1964 cost untold tens of thousands of millions of pounds. For someone who is taking Labour to task over the cost to say that they wasted millions of pounds is a little odd in view of those greater costs.
I adumbrated a substantial argument on how transport in London should be dealt with on 18 December when we discussed this matter. I shall address myself to the Bill, which concerns concessionary fares. History is being made tonight. It is not being reported, but is being manufactured. The Secretary of State glossed over the new issue. The Under-Secretary of State for Health and Social Security, the hon. Member for Hampstead (Mr. Finsberg) and I have an advantage as we were integrally involved in concessionary fares in 1968. Therefore, I can speak with some knowledge of the subject because I was involved in the whole process, including the negotiations.
It is interest to see how we have come to this position. In 1968 there were many arguments over the Transport (London) Bill. First there were arguments with Lord Marsh, subsequently with Mrs. Barbara Castle and finally with the right hon. Member for Sheffield, Park (Mr. Mulley). We had many long rows in those days. Lord Marsh was up against a GLC that had just been taken over by the Conservative Party. His discussions at the time with Sir Desmond Plummer did not land him in all the troubles that his successor got into. He did the original skirmishing with Sir Desmond Plummer.
Those in local government were aware that Sir Desmond Plummer would have nothing to do with taking over London Transport. The Labour Party argued over many years that it should be under the London County Council, which existed before the GLC. I did not think that that was right for a variety of reasons. The Labour Party's view was that it would be accountable to the people, so they would receive a better service. I did not believe that the evidence would bear out that argument. Even if they were written off, the London Transport Executive's debts would continue into the future because London Transport would never be a profit-making industry. By definition it could not be so. I preferred it to be under the Government than local authorities, which would have to raise the rates to pay for it.
Therefore, I argued that it was unwise to transfer the LTE to the GLC particularly as the Tory Party on the GLC was trying to frustrate that and was doing all in its power to make it difficult. If the power were to be transferred to the GLC, I argued that a contribution should be made from the rate fund to the running of the LTE. However, that was not possible as the rate fund contribution was not to be permitted. I said then that the Minister's commitment for contributions should also be written into the 1969 Act. But the Tories on the GLC opposed even that. They opposed the former because they wanted no possible connection between the GLC and the LTE as regards funds. They persuaded Mrs. Castle to introduce sections 5 and 7, particularly section 7(5) and (6) to preclude the GLC from making such payments. Everybody knew that. It was not new. No one—whether the Law Lords or anybody else—stumbled on it. I argued about it then. The Conservative Party was clear that it would not have it. Therefore, that subsection was specifically provided for that case. I refuse to accept the argument that it suddenly all became clear when the Law Lords considered it.
Furthermore, I then had to argue for section 40. At that stage it was argued that nobody would be able to provide concessionary fares. I disliked section 40 and said so in the House on Friday 14 November 1969, at column 778. It was wrong, but because the GLC would not accept responsibility for concessionary fares for London as a whole—I argued that it was absurd that somebody in


Hackney should not have to pay whereas somebody in Bromley should have to pay—section 40 was the best of a bad deal. Section 40 is in the 1969 Act because we pressed for it. It gave local authorities the right to produce concessionary fares.
As soon as we achieved that I, as honorary treasurer of the London Boroughs Association, and my colleagues, tried to persuade the LBA to commence the scheme provided by section 40. It was difficult, because the Conservatives were opposed to it. They would not have it. We argued and argued, month in and month out, in the huge mansion that houses the offices of the City of Westminster in Victoria Street. We tried to get the LBA to accept its responsibilities under section 40 but neither the GLC nor the LBA Conservatives wanted it. When the political atennae of the Under-Secretary of State for Health and Social Security, the hon. Member for Hampstead, got going, he realised that by December 1969–70 there would be elections. Therefore, he produced a scheme—and it was a very good scheme—that entitled people who were 85 years of age and infirm to travel concessions. [HoN. MEMBERS: "Sixty-five".] No, it was 85, not 65. Members of the public had to be 85 and infirm to be entitled to the concessionary scheme.
Eventually, we got the Tories to see sense, no doubt because of the coming election. We argued and negotiated with the LTE and finally got the scheme for £3 7s. 8d. for each individual pensioner's pass. The four Labour boroughs—Barking, Newham, Tower Hamlets and Southwark—gave the concession directly to their people. However, Conservative-controlled boroughs refused to do that. It became obvious that it was inequitable that somebody living in Hackney should receive concessions while somebody living in Barnet did not.
After discussions with various people in the Labour Party we came to the conclusion that the situation had to be put right. It was inequitable and quite wrong. I gave a commitment in the House that if the Labour Party was returned to power in the election of 1973 it would take over the scheme and make it applicable to everybody in London.
When the Secretary of State says that the scheme was superseded, he is wrong. The Conservatives continually opposed it. The election was fought on their opposition to it. The Labour Party brought it in when it was elected. That is how the scheme came about. We knew that it was illegal to try to do it under the 1969 Act. There is no doubt about that. It was decided to introduce it under the 2p rate provision. There was no dubiety about that. The London Transport Executive, the Government and everyone else were aware of what we were doing. The situation has continued since then.
By the time of the 1977 election, it had become obvious to everybody that there was great harassment by the Conservatives on the GLC, who criticised the scheme as a fraud. They said that pensioners could sell their cards, that different people should be eligible and that the cards should have photographs to identify the bearers. It was said that the scheme was too expensive and wide ranging and that the elderly should not be encouraged to travel freely. It became clear to us that if we were not careful, we would lose the scheme in 1977. We argued the case in the House and, as a result, Sir Horace Cutler threatened me with legal action and with a court case. He did so,

because I raised the issue of Sir Malby Crofton, who had made it clear beyond peradventure that in his view the scheme was open to fraud and should be stopped. Sir Horace was a bit closer to the old antennae than Sir Malby and did not want that. It was only as a result of our harassment that Sir Horace gave a commitment—much to his annoyance—that he would not scrap the scheme if he was elected in 1977. That is how the scheme continued under the Conservative administration.
As the scheme was popular, we heard no more about scrapping it. It is extremely odd that hon. Members should rewrite that bit of history. Having obtained the concessionary scheme, the GLC began to accept that it was good. It came along with us. I cannot see anything wrong with that. People tell me about Mr. Livingstone, but I must tell the House that they are lucky. In October 1981 a 25 per cent. cut was introduced after I and others had persuaded Mr. Livingstone against the idea of a free fares policy. There would have been such a policy. The 25 per cent. was the least expensive of the options. I always said that the figure was too high. A 10 per cent. or 15 per cent. reduction could have been taken steadily through and no one would have grumbled. We could have pursued the 2p concessionary fares scheme and there would have been no harassment.
Mr. Livingstone was unwise to go ahead, but in his defence I should point out that it is false to argue that the issue was not discussed before the election. No subject received more discussion. I became sick and tired of turning on the television at 6 o'clock and seeing Sir Horace Cutler and Mr. Andrew McIntosh arguing what it would cost next year and the year after that. Therefore, whatever the argument, the Conservative party exploited every inch of the issue and said that if the Labour Party won the election there would be free fares and that such a cockeyed idea would cost a fortune.
Hon. Members should not argue that no one knew and that the scheme crept through in carpet slippers. The Conservatives argued the case. They chose the ground and debated the issue all the time. London Transport was running fairly well. However, the Law Lords and everybody else has now become involved and total confusion has been created. Although I have explained why there was no initial need for the Bill, I accept that it is necessary now. If the Conservatives had not behaved as they did all those years ago, this measure would not have been needed, because provisions would have been incorporated in the 1969 Act. The Secretary of State is doing only what I and others argued should have been done in 1968.
Therefore, I congratulate the Secretary of State on the Bill which I, together with my hon. Friends, will support. However, I should have preferred an urgent public inquiry on the whole subject of public transport in London. I said that on 18 December, and I say it again today. In my view, the situation now is hopeless. Sense has to be brought to the situation. The Government should realise that they have a major responsibility to London. They must take the initiative. The Select Committee is examining the matter, so clearly we must do it the courtesy of waiting to hear what it says.
Meanwhile, it is not beyond the capacity of the Secretary of State to bring together all those who are concerned in London's public transport system, including the trade unions, to see how we can get out of the present impasse, because it is clear that Londoners will suffer


badly. The Secretary of State may say "Oh well, it's Ken Livingstone's fault", but that does not help any of my constituents in Hackney, South and Shoreditch to understand what will hit them on 21 March.
The problem will not be solved by loading the rates. I have many elderly people in my constituency, and the rateable values of their properties are higher than those in many of the outer areas of London. In fact, the rateable value of a one-bedroom council flat in my area is twice that of a comparable property in Worthing or in country areas. My old people may have a free pass, but they are paying a lot of money on rates. If they are not on supplementary benefit, they have to pay the money themselves. So they are having to pay out a great deal of money, instead of having a free fare.
Surely it is time for the Minister to call a meeting, as I suggested. Let us forget the shibboleths and the political dogma and get down to examining the problem. Let us try to find a solution so that we can help London, and get out of the mess that we are now in. If we do that, London will feel that this House has played its role.

Mr. Harry Greenway: The hon. Member for Hackney, South and Shoreditch (Mr. Brown) ended on a strong note, which I am sure all Conservative Members support. He said that there is no such thing as a free fare, because it has to be paid for in some way or other—out of rates or taxes, if not by direct subvention from the individual. I remind members of the Labour Party, both in the House and in county hall, of that fact, and of the severe effect of their actions on the rates paid by individual old people and disabled people. I shall come back to that matter later.
The hon. Member for Hackney, South and Shoreditch could have fooled me when he reminded the House that he had been a long-term opponent of the Greater London Council as a body. It is not long since I sat here through the night listening to him delivering a speech from where the hon. Member for Fife, Central (Mr. Hamilton) is now sitting. He spoke for 58 minutes, extolling the virtues of the Labour-controlled Greater London Council. Therefore, I speak as one who did not know of his long-term opposition to the GLC. I speak of his record in the House. I speak with respect, but the hon. Gentleman went out of his way on that occasion, and in lengthy speeches on other occasions—most of them during the night—to defend Labour actions on the GLC.

Mr. Ronald W. Brown: In 1963, I led a march with a silver band to Her Majesty asking her to refuse to sign the order from the House. The hon. Gentleman should understand that once it is the law of the land it is a different matter. I am a democrat, and a Social Democrat at that. I then had to work the law. I wanted to get the best that I could get for London. In my view, the GLC then had to work within the law. However, it was still a mistake.

Mr. Greenway: I thank the hon. Gentleman for that clarification of his position. He did not say that he had not spoken strongly in support of Labour actions by the GLC and in strong support of the group that is led by Mr. Livingstone, now in control, when he spoke in the House last April. I remind him of that as gently and generously as I can.
The suggestion that Tories are against concessionary fares schemes is not worthy of the hon. Gentleman. It is

possible that some individual members of the Conservative Party have at some time spoken against concessionary fares, as have members of other parties. I welcome the Government's initiative in the Bill to safeguard bus passes and travel concessions for the elderly and disabled as a clear sign of the way that the Conservative Party thinks today. I am glad that the Labour rumour that the Government were getting rid of bus passes for elderly and disabled people is well and truly nailed.
I wonder whether those responsible for running London Transport will consider whether in ensuring that the elderly and disabled have their free passes, they may travel during more hours. Many of these people find themselves in better heart early in the clay. If their presence on buses and on the underground did not disrupt people going to work, as I am sure it would not after a certain time of the day, I wonder whether it would be possible for them to use transport earlier than they are now allowed to do.
The broad problem of subsidy for London Transport has faced successive majority parties at County Hall. When people call for the kind of subsidies that exist in other capital cities, I remind them of an experience that I had when I was in Rome on parliamentary duty not long ago. I went out early in the morning and took a journey by bus of 4 or 5 miles. The cost, which I insisted on paying, was about 4p. The bus was absolutely full, but only three of those people paid during the 25 minutes that I was on the bus.
When people talk about getting London Transport on a par with other capital cities, they are probably talking about providing a free service in some instances. The money has to come from somewhere. Surely, to provide a free service is going well beyond what Londoners—even extreme members of the Labour Party at County Hall—are prepared to contemplate.
However, some subsidy is essential. I ask my hon. and learned Friend who is to reply to the debate whether there is any means by which London Transport can return to the May 1981 situation. At that time, a subsidy was agreed across the parties, and that situation has existed under successive political administrations at County Hall. However, we cannot continue with the sort of subsidy—certainly in terms of rates—which has been demanded by Mr. Livingstone and his friends.
Fares to work for my constituents are very high, as the hon. Member for Newham, South (Mr. Spearing) said. The London allowances, which are paid in most but not all jobs, cannot possibly cover housing, other items and fares at the levels that they will be under Mr. Livingstone. I wonder whether my right hon. and learned Friend the Chancellor of the Exchequer will again consider the possibility of allowing some element of fares to work over the distance between my constituency and the centre of London and above this to be claimable against tax for those involved in travelling such distances. Might a costing exercise at least be undertaken?

Mr. Dobson: That is called a subsidy.

Mr. Greenway: It is not a subsidy in my book, but a claim against tax. There is no vindication for the GLC, despite the chiacking of the Opposition, in the present situation.
People have written to me urging me to ignore Mr. Livingstone's speeches, which they deplore on this issue and most others, and to look at this matter in a straight and


reasonable manner as he has totally failed to do. Mr. Livingstone's supporters are saying that and he has done himself no credit. It has been irresponsible of him and damaging to the people of London that in his first year in office fares will have more than doubled and rates will have increased by 90 per cent. Whatever he says, he cannot deny that he and his friends held responsibility in county hall while that happened.
I must draw attention to the sort of irresponsible literature that the Labour majority at county hall has put about concerning this debate and several others. I recently received a card through the post on which a constituent was invited to sign his name in support of the statement:
The people of London voted for cheaper fares in the May 1981 Election and we consider it an affront to democracy that this sensible policy can be overturned by five Law Lords.
That is a denial of the protection of the rule of law for the individual and the community in a democracy. It is a very dangerous policy to keep knocking the Law Lords or anybody else when they are doing their duty. Nobody can possibly accuse them of engaging in politics, and it is grossly irresponsible of Labour Members to suggest that. Such cards are dishonest and highly damaging to the democracy they pretend to defend.

Mr. Jay: There is surely nothing undemocratic in arguing that the law should be changed. We are knocking not the Law Lords, but the Secretary of State because he will not change the law.

Mr. Greenway: That is not what the GLC is doing. I do not say that the right hon. Member for Battersea, North (Mr. Jay) has been dishonourable in that way. However, the majority party in County Hall is putting about remarks, statements and documents that are damaging to the very democracy by which it seeks to live, and that should cease.
My hon. Friend the Member for Woolwich, West (Mr. Bottomley) priced the publicity campaign at £250,000, which is about right. The little newspaper slips that hon. Members in London are receiving will probably cost the campaign about £100 a time in terms of the number that each hon. Member receives against the cost of the campaign. It is disgraceful that those who send them are being conned into heavy rates expenditure in that way. There is nothing wrong with invoking the parliamentary and democratic process, but to do so at high public expense in this manner is wrong at a time when Londoners face a 90 per cent. rates increase, which will cost jobs and further damage the capital that we all love so much.
It is clear that Mr. Livingstone cannot be given carte blanche on public transport matters or anything else. His freedom to levy extra rates on Londoners must be properly justified and surrounded by democratic and legal safeguards.
The 25 per cent. reduction in fares followed by a 100 per cent. increase is utterly incomprehensible. Mr. Livingstone has made no effort to explain the policy. It is interpreted as a sleight of hand, and that may be the fairest interpretation one can place upon it. My constituents and those of all other London Members must pay for this policy and they are damaged by it.
My right hon. Friend the Member for Worthing (Mr. Higgins) asked what had happened to the £50 payments to

London Transport employees. Is that now considered a gratuity? We and the public who financed that subsidy through their rates are entitled to know that.
Subsidies above May 1981 percentage levels cannot be imposed upon ratepayers, including industrial ratepayers, as my right hon. and hon. Friends will all agree. If there are to be greater subsidies they must come from the national Exchequer with a special tax on foreign visitors. It makes no sense that overseas visitors should be subsidised by the rates and taxes of our people.
The supplementary rate, the prospect of which faced everybody until it was quashed, was a complete disgrace. Although it has now been quashed, it frightened and damaged many elderly and disabled people. Elderly people of 80 and 90 years wrote to me, or came to me if they were fit, explaining that they were required by law to pay the substantial supplementary rate to finance lower fares, but that they had bus passes. What value was that to them, therefore? Similarly, disabled people who were unable to leave their homes were required to pay the supplementary rate. They gained nothing from the cheaper fares.
In the interests of proper fare levels, I must ask what the GLC is doing about fares fiddling. The Standard exposed substantial and grave fiddling, if it was right—and it has not been told that it was wrong—at the Acton garage. Was the Acton garage singled out? If so, that was unfair. However, if the alleged fiddling was part of a pattern, the whole racket should be nailed. If fiddling is at the level that The Standard asserted, that would greatly affect the cost of fares. It is up to the GLC to do something in the interests of Londoners.
"Fares Fair" is a curious term. If one refers to the definition of "fair" in Chambers dictionary, it says:
bright: clear… free from blemish: pure: pleasing to the eye … equitable… plausible".
It is certainly plausible.
Each of us is his own judge of what is fair and equitable. What is fair for one person is unfair for another. For example, can a fare be set that is equally fair to an unemployed person and a millionaire, to the low-paid of London and the wealthy tourist from the provinces or abroad? The answer is "no". The fair requirement is that which Londoners can reasonably afford to pay balanced against what it costs to provide the service.
An objective answer to that question is crucial to the ability of my constituents and all Londoners who travel to work to pay their way and to retain their self-respect, in their private and working lives and in the way in which they conduct themselves in the nation's capital.

Mr. Thomas Cox: All London Members should welcome the Bill not only because its main purpose is to rectify the position on concessionary fares but because it provides an opportunity to discuss the whole question of public transport in our capital city. The history of concessionary fares goes back to the time when I was elected to the House in 1970. One of the first issues to involve London Members elected in that year was the introduction of the scheme. In time, we succeeded. However, success was achieved only after a great deal of effort.
London has a concessionary scheme that is the envy of all parts of the United Kingdom. It had, nevertheless, to be fought for. Elderly people, I know, see no greater threat


to their mobility than the possible loss of the scheme. Hon. Members should not lose sight of the fact that the Conservative Party, both in the House and across the river at county hall, never looked favourably upon the scheme. In the 1977 GLC elections, Sir Horace Cutler, the Tory leader, had to give a firm commitment, if there was to be another Tory GLC, that elderly people could rest assured that their concessionary fares scheme was not threatened.

Mr. Eggar: Was not the reason for Sir Horace Cutler making the statement the scurrilous and completely unfounded rumours put forward at the time by the Labour Party?

Mr. Cox: The hon. Gentleman has only just come into the debate. Whatever he may say, there was genuine fear among people in my constituency and, I am sure, many other constituencies in London. It is no good the hon. Gentleman making that kind of remark. There was fear following statements made by leading Conservatives at county hall.
Had the Bill not come before the House today, certain local authorities in Greater London would have done nothing to keep the present scheme. I am sure that Tory-controlled Wandsworth, noted for making savage cuts wherever possible, would have been one of the first to say that it could no longer afford the scheme. Its attitude would have been that many car owners living within the borough were prepared to help old people get about.
I welcome the Bill. It gives the GLC the power to ensure that the scheme will continue. I hope that similar schemes will be introduced in all parts of the country as soon as possible. As a member of the all-party group on pensioners, I find this the one issue that comes up time and again, as many Conservative Members, who are regular attenders at our meetings, will confirm. Pensioners have told us of the terrible, or non-existent, schemes in their parts of the country.
There has been much comment about what actually took place in the run-up to the GLC elections last year. I have no doubt that the Labour Party fought that election on a clear commitment towards a cheap fares policy. Since then, sadly, there has been a non-stop campaign of hostility against the Labour GLC, and particularly its leader Ken Livingstone. However, anyone who had been interested enough to find out the issues on which the Labour Party campaigned can have no doubt that the widest possible publicity was given to this issue.

Mr. Ted Graham: There has been reference by more than one hon. Member to the scarcity of publicity on Labour's policy on transport. I should like to refer to a debate that took place in the House on 13 March 1981 when the hon. Member for Ravensbourne (Mr. Hunt) said—

Mr. Speaker: Order. Is this going to be an interruption? I gathered, by his earlier movements, that the hon. Gentleman hoped to catch my eye. He will then be able to make his speech.

Mr. Cox: I think, despite your ruling, Mr. Speaker, that I have the gist of what my hon. Friend intended to say. A great deal of discussion was concentrated in that debate on what the London Labour Party was saying on this issue. There was a great deal of publicity. Many public meetings were held throughout London. I recall a meeting held by the four Labour GLC candidates in Wandsworth attended

by well over 300 people. The bulk of the questioning from local people, who had come to the meeting because they were interested in hearing about what was proposed m the Labour manifesto, centred on fares.
People knew what was being stated by the Labour Party in London. They also knew that the policy would result in increased rates. All hon. Members, irrespective of the party or the part of the country that they represent, know that increased rates are not popular. Whatever the issue, local ratepayers, if they have to pay money, are not happy. However, this is one issue from which, during the short time it has been in operation, people have begun to see the benefits.
The Secretary of State said that high rates cost jobs. I have received letters from local people who say that a direct result of the introduction of the scheme is that they have more money in their pockets. One man has told me that his take-home pay was £68 a week, out of which he was paying £10 a week in travelling expenses to get to his place of employment. A few years ago, certainly in my area of Wandsworth, there was any amount of local work. That work has now disappeared. People have to make long journeys to work. The introduction of the lower fares policy has meant that people can still get to work and yet have more money in their pockets. I am sure that the example I have given can be matched by many hon. Members.

Mr. Kenneth Clarke: The hon. Gentleman is the first Labour Member who, to my knowledge, has gone into the delicate matter of who is to pay for the policy that he defends. Will he answer the question that his hon. Friend the Member for Aberdeen, North (Mr. Hughes) declined to answer? Is he saying that the GLC should be allowed to treble its rate precept, which would have been the result of the cheap fares policy but for the Law Lords judgment?

Mr. Cox: Whether or not there would have been a trebling of the rate by the GLC prior to the Law Lords decision, I know that there will be enormous problems for many people in London who have to pay the increased fares from 21 March and who have to consider the fares that will apply in London by the end of the year. We should consider that point.

Mr. Martin Stevens: Does the hon. Gentleman accept that the Attorney-General's statement on the significance of the Law Lords decision would permit the subsidy to be payable at the November 1980 budget level and thus materially reduce the danger of increased fares in addition to the proposed increase on 21 March?

Mr. Cox: In fairness to the hon. Gentleman, I have some difficulty in following that point. I do not accept it, because I cannot follow its full implications.
No one disputes that extra rates have had to be paid. We have heard much criticism about the opposition to paying increased rates. No one likes paying extra rates, no matter what the purpose of the levy. I do not think that my correspondence is different from that received by other London Members of Parliament. By no means everyone complains about increased rates. I quote one of many letters from electors in my constituency. The letter, dated 20 February, says:
As a ratepayer and an irregular user of London Transport, I voted Labour in the GLC elections with the full understanding that the policy of reduced fares would mean increased rates. It


seems one of the most worthwhile uses of rate money to make public transport cheaper both for the immediate benefit of those wo have to use it regularly, and for the long-term benefit of all of us in making London a pleasanter place to live in.
There are, therefore, those who favour a cheap fares policy irrespective of their increased rates bill.

Mr. Greenway: Most people can do their sums. Many will find that they are substantially better off with the lower fares despite the higher rates. Naturally, they will support the scheme. Others, of course, may take an altruistic view, but the first motive should be borne in mind to make a fair evaluation.

Mr. Cox: I am sure that people will do that, just as they would on any other issue. The hon. Gentleman is saying something of which we are all aware. Nevertheless, although rate increases are not popular, some people regard this as a general improvement for London. All hon. Members, especially those representing London constituencies, should bear that in mind.
By and large, the debate has been fairly good, but it saddens me to hear the usual criticism about cheap publicity stunts by the GLC. The hon. Member for Ravensbourne (Mr. Hunt), unusually for him, sank to the utmost depths of cynicism when he said that it does not take much imagination for Londoners to take a pair of scissors and cut out and sign a piece of paper saying "I support the GLC low fares policy."
I have received about 130 letters or "pieces of paper" this week. To me they show that as both Londoners and ratepayers people support and welcome the GLC's policy. The House should take note of those views. We are always being told that we do not take note of what the electors tell us. They are now telling us that they support the scheme which has been working for about four months. Even in that short time, the benefits of the scheme are there to be seen. As I said in an intervention in the speech of the hon. Member for Woolwich, West (Mr. Bottomley), a document in my possession shows that more than 2 per cent. of people who had previously used motor cars to get to work were now using London Transport. That is a clear benefit, even at this early stage in the scheme, but the benefits go further. There will be a benefit if cars are kept off the road. There will also be a more efficient transport service. One has only to consider how often the House discusses the congestion of city streets due to the enormous number of private vehicles to appreciate that point.
We were beginning to see a reduction in the number of cars on the streets of London as a result of the scheme. That would have continued, but sadly it will now stop. For several years, London Transport has not provided the type of service needed in London. There were long delays and cuts in services. I received many complaints about services and made visits to 55 Broadway, where the head of transport at the time would invariably say "I am terribly sorry about the delays and the infrequency of the service. I am doing my best, but I have all these problems."
To its credit, the GLC was beginning to tackle some of those problems. Yet we are repeatedly told that the scheme had not been properly thought out and that the GLC was concerned only to pursue Marxist ideas. It is to the GLC's credit that it was prepared to introduce a scheme for the benefit of London and its people.
Monday's edition of the Standard, in a front page article about transport in London, said that by July this

year there would be 500 fewer buses and that between 400 and 600 bus crews would lose their jobs. Everyone knows that that will cause enormous problems for many people living in London. There must be a regular, efficient public transport system. People want it, and they are undoubtedly prepared to support it.
We must accept, as other countries accept, that this type of service cannot be compared with profit and loss accounts. There must be subsidies. It would be to the greater credit of the Government not to wage a campaign against the GLC.
The Secretary of State for Transport has stood at the Dispatch Box countless times and let loose a torrent of abuse against Ken Livingstone. How much more beneficial it would have been to London and how much more credit it would have been to him as a Minister if he had said "There are things in the scheme that I am not happy about, but it has the right idea and I will have meaningful talks with the leader of the GLC to see how I can help to develop this kind of scheme for the people of London".
We have heard that fares increases will come into effect on 21 March. We should be concerned about not only the fares increases then but what fares the people of London will have to pay by the end of the year. I hope that I am wrong, but I have a feeling that they will be very high. As we all know, because we have seen it time and again, the result will be more cars on the road, fewer people using public transport and more losses, which will force the cost of public transport even higher. We shall go round and round in that stupid system. That is what this issue is about.
As a London Member, I must say that, come what may on 21 March, it will not be the end of the battle for me. The letters—the pieces of paper, as they are described by some Members—and other indications of support that I have received over the past two to three weeks show me that the people of London want this type of scheme. Steps may have to be taken to make it more efficient—to iron out some of the problems—but I believe that the people of London want the basis of the scheme. I tell those whom I represent that I shall continue to do all that I can to support the GLC in the introduction and continuation of that kind of scheme for the people of London.

Mr. Neil Thorne: I listened with interest to what the hon. Member for Tooting (Mr. Cox) said about the Conservatives and his view that they are never enthusiastic about handing out money. I believe that to be true, because my hon. Friends and I always wish to be sure that we know where the money will come from and what the effect will be.
When a scheme is found to work I have experienced no lack of enthusiasm among my hon. Friends for its continuation. That certainly applies to concessionary fares for the elderly. Therefore, I see no inconsistency in that regard.
The hon. Gentleman said that the Labour Party manifesto was absolutely clear about its intentions before the Greater London Council election last spring. I accept what he said. Sir Horace Cutler made it perfectly clear on television what would happen to London and its rates if a Labour GLC were returned. Nevertheless, I am not in the least surprised at the outcome of the Law Lords decision, because I was present when the matter was discussed in


1968 and 1969, when the GLC, at that time controlled by the Conservative Party, was very reluctant to take on a new substantial albatross.
The lady who was then Secretary of State for Transport was equally anxious that the GLC should take on this responsibility, and she had to concede that the undertaking be handed over to the GLC without any charge for land, buildings, fixtures and fittings, tunnels, stations, railway lines, rolling stock or buses. All those items were handed over to the GLC absolutely free for the purpose of running London Transport.
The GLC in those days did not wish to have a substantial extra annual financial commitment. Therefore, it was happy to include the matter within a restricted rate. The feeling was that London Transport, accepting the free gift of the capital items, would so far as possible be run without further charge to the rates. However, it was realised that as rolling stock wore out and new inventions were made, as new signalling equipment and other items were introduced, it would be necessary to inject a further subsidy for capital items, but it was always the intention of those in control of the GLC at the time that the subsidy should be limited to such cases.
Much is said about what happens now in Paris, New York, Brussels and elsewhere. I remember being criticised when I was chairman of the central area board on the GLC because London seemed to be lagging behind in the provision of pedestrianised streets. I took an opposition colleague who is now a noble Lord, and some officials on a visit to see what the position was. We went to a number of European capitals where the main shopping streets had been converted into pedestrianised streets. We found that that had been done because the authorities had had to build bypass roads to carry the traffic while they were building underground railway stations and lines beneath their main traffic routes. That had forced them into closing those roads in the first place, which subsequently enabled them to make the streets into pedestrianised thoroughfares, an entirely laudable concept.
That shows that those capitals had been investing vast sums of money in their undertakings in recent times. Therefore, they must naturally expect to have substantial subsidies to buy the land, build the stations, put in the tunnels and provide all the other expensive items.
Opposition Members have been very glib in giving what they suggested were the comparable figures for the costs in other cities, but I have found the greatest difficulty in obtaining accurate figures for other major cities throughout the world, though I have gone into the matter in considerable detail. The latest figures that give a fair comparison go back as far as 1976. I fail to see how Opposition Members can justify current figures showing exactly comparable results to those on which we are reviewing London. I should be grateful if they would show me where I could find those figures. I have written to the director-general of the GLC on the matter. We shall have the opportunity to debate the subject again, perhaps many times in the coming months, and I should welcome an opportunity to see what figures there are and compare like with like. I do not believe that like is being compared with like at present.
The London system has been the envy of the world. When I was a member of the GLC people came from Tokyo and other cities all over the world to see the London underground system, on which they were going to base

their own. They now have much more modern and up-to-date systems, but those systems must be funded. They have enormous capital costs, and it would be unrealistic for us to compare our subsidies in the capital with those paid elsewhere. It would mean paying twice. We made our investment many years ago, and it would be wrong to try to carry out such an exercise.
I enjoyed the characteristically robust speech of the hon. Member for Hackney, South and Shoreditch (Mr. Brown). I was interested to hear him say that if he had had his way he would never have allowed the GLC to come into existence. That would have denied me the pleasure of discussing traffic matters with him in his constituency when I had that responsibility many years ago.
I was also interested to listen to the hon. Member for Newham, South (Mr. Spearing) with his statistics on the likely new fares in the latter part of next month. However, I think that he was referring to some stations entirely outside the GLC area. The people who use those stations would not have to make a contribution to the rates through their residential accommodation. We should be clear on that point.
I welcome my right hon. Friend's proposal for a continuation of the fare concessions for the elderly. However, I am not enthusiastic about its being dealt with on the same basis as the rest of the country. Because hitherto the use of the 2p rate has been within the discretion of the GLC, it will mean that the revenue from that 2p rate will be available for other purposes. 1 am not enthusiastic that it should be used for homosexual clubs, supporting Left-wing printing presses or other purposes which are not an appropriate charge on the rates. We should all have the privilege of financing our own political and social needs and I do not think that these are a fair charge. Therefore, I do not appreciate the possibility that the 2p rate will be released by my right hon. Friend for these purposes.
I am glad that he right hon. Member for Battersea, North (Mr. Jay) referred to the cost benefit analysis of a transport undertaking. Viability and value for money are important aspects. The figures he gave which showed. a 12 per cent. subsidy are complete nonsense. It was wrong not to include the fares concession for the elderly which puts the figure up to much nearer 20 per cent. After 21 March the total including depreciation and renewals will be 30 per cent. or more. It would have been more honest to have said this in the first place.
Something which Opposition Members do not seem to understand or accept is the effect of financial engineering on the value of property. We all like to have something free or cheap. But we must always look a little beyond the immediate future. A substantial part of the London weighting that is given to civil servants, bank officials and in increased salaries to people who work in the City of London and elsewhere in the centre of the capital is determined by the cost of getting to work. If anything is taken away from the cost of getting to work, the London weighting allowance would disappear or be reduced substantially. Therefore, it is wrong to assume that this money will be put directly into the pockets of the staff. It will not be long before the money will go into the pockets of the employer, be it a nationalised undertaking, the Government or a private firm. So the euphoria that would go with reduced or cheap fares would be short-lived and therefore bogus.

Mr. John Fraser: Does the hon. Gentleman agree that a corollary of the argument he is putting forward for the maintenance of the London allowance is that if we are not to have cheap fares we ought to have a London allowance for those in the youth opportunities scheme, the unemployed, those on social security and other low income groups?

Mr. Thorne: The people who need to come into the centre should have an allowance which is taken into account in what they receive. If they have no need to come into the centre, that should not be included.

Mr. John Wheeler: While my hon. Friend is dealing with the inner London weighting allowance, may I ask him whether he would agree that there are over 10,000 people employed by the Inner London Education Authority earning more than £10,000 a year, including an inner London weighting allowance of between £600 and £1,000? Would that allowance be removed if the fares were reduced or if there were, as some people claim there should be, free fares?

Mr. Thorne: I am grateful to my hon. Friend. That is correct. The London weighting allowance would be affected directly by the cost. Obviously it would not be removed for a reduction in fares but there would be an effect upon it. Either it would not be put up at the next review or it might be reduced.
The point I am trying to make is that a cheap fares policy will affect costs for the employer in the centre and ultimately the rent he can afford to pay for his premises. Therefore, if we have a fares scheme which is cheap or free the value of property in the centre of the city will increase correspondingly because the demand for it will increase; employers will have more money to pay by way of rent and less by way of weighting allowances.
The GLC's cheap fares policy has already had an effect on the cost of accommodation. People who can travel a longer distance tend to buy property further out in outer London or even outside London altogether. If they were paying a fare which was related more to the cost of providing the service they would make an effort to live closer to their work. This has been established clearly in the last few months. Therefore, we have to accept that two or three years ahead the greatest effect would be on rents and the value of property.
It would not be so bad if the firms being put at a disadvantage were not the industrial firms which are now virtually excluded from the centre of the city and which are struggling to exist and provide employment in outer London. These firms would have to pay through their rates for other people to travel on concessionary fares into the centre of the city. Is that what we want? I do not think it is. We want the firms in outer London to have every opportunity to succeed and to be able to provide employment for the people nearby who cycle, walk or travel by car or bus a short distance to get to work, many of them being women doing part-time jobs.
These are the firms which we want to prosper. This will not happen if we put up their rates substantially to provide reduced fares for office workers travelling to the centre. Labour Members never realise the effect cheap fares have on the value of property.
Subsidies are important. They should be restricted to providing essential improvements which are needed to keep a modern and effective transport system going. The

Government should apply their mind to improvements such as single manning on the railways, automatic ticket dispensing and collection and new signals systems. There are many things that money could be used for in a cost-effective and productive way. It is entirely wrong for a misguided GLC to pour money willy-nilly into a transport undertaking. The GLC wants to provide money at somebody else's expense to make it easier for those within its organisation to demand excessive wage rates. That is entirely wrong. It is necessary these days for every worker to achieve maximum productivity. I could not see that happening with the GLC's fares fair policy.
I am delighted that my right hon. Friend has introduced his proposal for concessionary fares for the elderly. When the issue arises, I hope that he will consider selective subsidies and not general subsidies of the type previously proposed.

7 pm

Mr. William Pitt: I listened carefully to the argument of the hon. Member for Ilford South (Mr. Thorne) on work in outer London. I remind him that those who travel to work in outer London have to do so by bus, and that from 21 March their fares will be doubled. Indeed, in some instances they will be trebled. Their compatriots who have to travel to London—many people in my constituency, and in most South London and North London constituencies have to travel to London because that is the predominant pattern of work—from Norbury or Thornton Heath, for example, will face an increase in the annual fares bill of about £300.
How is the increased bill of £300 to be met? Will there be an increase in London weighting for those who receive it, or will it come from increased salaries? Will it come from a decrease in their standard of living, or will it come from some magic source? From wherever it comes, it will be inflationary.
Conservative Members have failed to grasp that we are not talking only about rates. We are discussing an effective system of subsidising transportation in London. It is a major European city and our capital. Cities such as Hamburg, Paris, Berlin, New York, Philadelphia and Baltimore subsidise the operating costs of their public transportation systems by about 50 per cent. The subsidisation of London Transport from 21 March will be less than it was in the reign of Sir Horace Cutler, which seems daft to say the least.
I hope that an effective system of subsidising transportation will come from the Select Committee's report. I echo the words of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown). I ask the Minister to take careful note of the Committee's report. I am sure that it will produce ideas for the selective subsidisation of transportation in London and in other major cities.

Mr. Chapman: I understand the hon. Gentleman's view about the level of the subsidy that is given to London Transport. It is a lower proportion when compared with that provided for many cities in the industrialised world. However, will he concede that the national subsidy that the Government are giving to public transport is about the same percentage of our gross domestic product as it is in most other countries? Therefore, does he advance the argument that we should be subsidising rural transport less and city transport more? Does he subscribe to that view?

Mr. Pitt: I do not do so particularly. I see a neat little catch in it. I agree with the hon. Gentleman about the national Government subsidy as a percentage of GDP and the amount expended on public transport by the Government. However, we should not subsidise one section of the transportation system to a greater or lesser extent than we subsidise the other sections. Those who live in rural areas have a great need of public transport. In most instances, there is insufficient public transport in rural areas, which leads to increasing reliance on motor cars. In many villages and small towns, those who do not have motor cars find themselves at a great disadvantage.
London has unique problems. It needs a special public transport system. First, it is necessary rapidly to transport the public to their places of work within a concentrated peak period. As the capital has centres of culture and entertainment and places where people gather together, including the House, it is necessary to transport people over a wide area 24 hours a day. We cannot shut down our bus or underground services at 9 o'clock at night.
If the Government's transport subsidy policy is extended, we shall not see buses or underground trains after 9 o'clock at night in many areas. The cost of fares has been related to the cost of one and a half gallons of petrol. The average consumption of petrol per person per car, allowing for the average commuter occupancy of 1·2 persons, is about six times that of a bus with an average occupancy of 25 passengers. In the Greater London area, about 130,000 cars enter the capital during the peak hour. Surely it makes sense to have an effective transportation system that will remove those cars from the roads.
London was not clogged to the gunnels during the ASLEF dispute. Although more people were entering the city by car, because of the greater availability of car parking facilities, many more were using the buses because the fares were attractive. The public were inclined to use buses even if they had to wait a long time for them and had to experience some discomfort.
I do not support the way in which Ken Livingstone and his colleagues instituted their subsidy. It amounted to gross political folly. If they had discussed the issues with their policy makers more carefully, they might have been able to introduce a more beneficial policy. However, it is clear that there must be a proper subsidy for London Transport. It is necessary to bear in mind the capital's entire transportation system. We should not confine our attention to buses and underground trains. We must include within our consideration the suburban railway system, upon which most of my constituents who work in London depend for their transport, apart from travelling to and from the railway station by bus. The entire system must be brought under one umbrella.
The first step should be to create a passenger transport authority or a passenger transport executive for the Greater London area. The second and concomitant step is to introduce a proper and effective system of subsidisation that is not provided only by the rates paid by those who live in the Greater London area. Those from without Greater London often benefit as much as those from within if such a policy is implemented because of the attraction of central London for employment.
The Government must consider introducing an overall subsidy in playing their role in subsidising and ensuring the effective running of the capital. If that is not done, I fear that London will grind to a halt. That will mean that more than 130,000 cars will enter London during the peak

hour. If that happens, I shall get into my car to drive into the capital during the peak hour, turn on to the A23 and find myself still sitting below Thornton Heath Pond roundabout two hours after I started.
If London grinds to a halt there will be fewer buses. The buses will be taken off the road at 9 o'clock in the evening and the stock of buses will be reduced. It is not possible to keep buses idle all day while we wait for the commuters to use them. By reducing our stock of buses, there will be no spare buses to use while those in the regular fleet are being maintained. There will be fewer underground trains for the same reasons. If we do not invest adequately in the suburban railway system shortly, much of it will fall apart as it passes through Clapham Junction.
I suggest that the Minister examines the report of the Select Committee with care. I suggest further that he introduces a Bill in the House as soon as possible to ensure effective subsidisation and the effective running of London's transport system.

Mr. Hugh Dykes: I am sure that the hon. Gentleman will not mind if I suggest that his speech is somewhat vague. What is he getting at? He referred to Mr. Livingstone overdoing it—to use a colloquial tern. Does he believe that the subsidy was too great. or too sudden? What was his objection to the Labour policy? What would he like to see instead? He has not properly answered those questions. Does the hon. Gentleman believe that the subsidy should be lower than originally proposed by Labour? The hon. Gentleman represents an alliance that should clarify its views on the subject.

Mr. Pitt: The alliance is clear in its view on that. I made my views clear when fighting the by-election, when the electorate roundly turned down the Government's present policies. I was not criticising the size of the subsidy, but the manner in which the subsidy was created. I said that the Government must look for an effective \A ay of subsidising Greater London's transport system, and I specifically said that we should not use the rates paid by the residents in the Greater London area as the sole source of subsidy. That is not done in foreign capitals. Other taxes and duties are involved. We should be considering such schemes.

Mr. Roger Sims: My hon. Friend the Member for Harrow, East (Mr. Dykes) was optimistic in expecting a straight answer to his question.
I was glad to hear the hon. Member for Croydon, North-West (Mr. Pitt) say that he is no supporter of Mr. Livingstone, but I am sorry that he appears to have swallowed so many of the scare stories that Mr. Livingstone and his political cronies have circulated on the possible effect of a fares policy which has been laid out on a sensible and equitable basis.
To the extent that the Bill clarifies the law, l am prepared to welcome it. But I hope that my hon. and learned Friend the Under-Secretary of State will understand if that welcome is less than enthusiastic. The Bill is a curious demonstration of a principle that I have always understood to be central to Socialist views—that one takes from each according to his means and gives to each according to his needs. Who is to pay for this subsidy? The ratepayers, including those on modest incomes, and not least the pensioners themselves will pay.
That includes pensioners who, by virtue of their health and circumstances, cannot take advantage of public transport. It includes those living in the part of South London that I represent who cannot take advantage of a subsidised underground system because they do not have one. The hon. Member for Westhoughton (Mr. Stott) will no doubt tell me that Southern Region could have had a subsidy, but he knows that that is an absolute red herring. Southern Region already receives a substantial subsidy. A subsidy from the rates for Southern Region would completely distort the pattern. It is impracticable since the services on Southern Region go beyond the GLC area. I cannot believe that it is seriously suggested that the GLC should subsidise people commuting from Kent, Surrey and Sussex.
The ratepayers will be paying for the subsidy, but who will be the beneficiaries? All the pensioners who apply for a pass in the GLC area will benefit regardless of their circumstances. Not only will pensioners living on a modest State pension benefit, but retired people receiving substantial public service or company pensions.
I accept that the GLC is entitled to do as other local authorities have done and exercise the right to introduce so-called concessionary fares. However, that is a blunt instrument because of the way in which it operates. I hope that when the Bill is passed the GLC will consider refining the way that it works.
We have been referring to concessionary fares, but for pensioners concessionary fares mean free travel on buses.
It is not unreasonable to charge pensioners who apply for a pass a modest fee. That would deter people who do not seriously intend to use the pass from applying for it. It is well known that many pensioners apply for the pass because they know that they are entitled to do so, but they make little use of it. The ratepayer still has to pay because the subsidy is calculated on the number of passes issued.

Mr. Graham: Can the hon. Gentleman give the evidence upon which he makes the categorical statement that many old-age pensioners apply for a pass and make little use of it? I have heard the rumour, I have heard that smear against the scheme, but what is the evidence?

Mr. Sims: It is not a smear against the scheme. I have had conversations with constituents who say "I knew that I was entitled to a pass, so I applied for one, but I do not make much use of it." I do not criticise people for doing that, because they are entitled to do it. If a modest fee were charged, that would happen less frequently. Since the ratepayer has to pay for the pass regardless of whether it is used, it would be a good step to take.
It is not unreasonable to make a modest charge for travelling with the pass. Perhaps there should be concessionary fares rather than free travel. For some years, the holder of a pass has been able to travel free on the buses but has had to pay 20p on the underground. That is not unreasonable. Most pensioners would be willing to pay 20p or 30p on the buses as well as on the underground. It would help them to value the facility and provide a modest supplement to London Transport's income.
I protest vigorously on behalf of my constituents about the irresponsible way in which the GLC is spending over £200,000 of ratepayers' money on a campaign which is intellectually dishonest. Someone with a suspicious mind might wonder why the campaign is being waged just as we are approaching the borough elections.
It is interesting to read the following words:.
The judgment
that is, the Lords judgment—
has given the Labour Party the best spur we could have hoped for before the local elections next May…We are going to spend £250,000 on the campaign. It is a real fillip for us—the best thing that could possibly have happened.
Those are the words not of an obscure member of the Labour Party but of a gentleman not unknown to hon. Members—Dave Wetzel, the chairman of the GLC's transport committee, and the gentleman responsible for putting the GLC's finances in the mess that they are in today. Hon. Members should note his words. He said that the Lords judgment was
the best thing that could possibly have happened.
One might have thought that the best thing that could happen was for the "Fares Fair" policy to continue.

Mr. Campbell-Savours: The hon. Gentleman complains about the £250,000. Will he weigh that against the £4 million given away in Committee on the Finance Bill last year in capital transfer tax concessions to people with in excess of £200,000 in assets? Does he think that that is a better investment of public money?

Mr. Sims: I shall not weigh that because it has nothing to do with the issue.
I modify my criticism of the campaign only in one respect. No politician will complain if his photograph appears in The Standard. My constituents may be impressed, Mr. Deputy Speaker, at the way in which my photograph is juxtaposed with yours, but if they look more closely they may be intrigued at the company that I appear to keep.
My right hon. Friend the Secretary of State clearly demonstrated the sheer hypocrisy of this campaign, with its emphasis on low fares, in the newspapers, advertisements and leaflets. No reference at all was made to the central question: who pays? The answer is: our constituents. Of course, it varies with the rateable value of the property, but in an area such as mine it could have meant about £2 a week on the rates this year had the so-called "Fares Fair" scheme continued. On the admission and, indeed, boast of the GLC, that figure would increase steadily and steeply over the next three years.
Not only domestic ratepayers pay rates. Well over 60 per cent. of rates are paid by industry and commerce. The GLC must realise that, by increasing the rate bills in the way that it has, it is closing down some businesses and driving others out of London. The fares structure that will come into effect on 21 March is broadly in line with that which existed before last October, not least with regard to the subsidy element.
It is clear from the Lords judgment that that structure is legal. That has been confirmed by my right hon. and learned Friend the Attorney-General. I was surprised that the hon. Member for Aberdeen, North (Mr. Hughes) quoted from the views of my right hon. and learned Friend, as if he were trying to make a case. The Attorney-General's view clearly confirmed that the present structure is legal. His statement clearly revealed the GLC's campaign for the sham that it is. Further legislation in this area is neither vital nor essential. It is not needed to retain the zonal system which, I am bound to say, is the one successful element of the scheme.
Legislation is not needed to introduce a fares structure that maintains a reasonable balance between the farepayer


and the ratepayer. If ever there was a phoney political campaign, it is the "Fares Fair" campaign. The Labour Party should be ashamed to be associated with it.

Mr. Ted Graham: All hon. Members will give the Bill an unopposed passage. I am glad that when the Secretary of State opened the debate—I listened to every word—he sought quickly to set the issue in context. The right hon. Gentleman then proceeded to widen the debate, so that we have been debating not only a concessionary fair system for the elderly in London but the broad aspect of what has been happening to London Transport over the past three or four months. I believe that the House, London ratepayers and travellers will have benefited from that.
The Secretary of State and others have deplored the fact that there has been only one political side in this argument. Mr. Ken Livingstone, members of the GLC and Labour Members have been castigated for fighting a political campaign. The House will recognise from the language used by the Secretary of State, the Under-Secretary of State and others that they are no mean hands at taking part in a political fight. It is a sham and a hypocrisy of the worst kind—a Tory hypocrisy—for them to assert that they are acting in a non-political manner while Labour Members and members of the Labour GLC have been acting as politicians. Of course Labour GLC members have been acting as politicians in deciding, rightly or wrongly, to implement their policies, and they will be judged on their performance at the next GLC elections.
Although the GLC has been castigated for the size of the supplementary rate, very few Conservative Members have given any credence to the fact that the supplementary rate was not wholly due to the fares policy.

Mr. Dykes: Even if the hon. Member and others, including myself, are in favour of some reduction in fares—I think that many people would have been in favour—how can he accept that it was reasonable for the new GLC leadership, including the transport committee chairman, Mr. Dave Wetzel, who signs all his letters "Yours in Socialism, Dave", to be so provocative as to impose a violent reduction overnight that would have had a sudden and adverse effect on all of London's ratepayers? Could not that reduction have been staggered or explained further, bearing in mind that Labour won the election on a minority of the total electorate?

Mr. Graham: If we are arguing about the extent to which a party that wins power at an election should temper its promises in the light of later reaction, the Conservative Party has some lessons to learn from its activities during the past 2½years.
I am glad that the hon. Member for Ravensbourne, (Mr. Hunt) is present. I referred earlier to the fact that before the May election he drew the Labour GLC's proposals to the attention of the House and the ratepayers. In a debate on 13 March he said:
The financial irresponsibility that epitomises the Labour Party's policies in the forthcoming GLC elections is demonstrated clearly in the madcap proposal to reduce London Transport fares by 25 per cent. and then to freeze them for four years."—[Official Report, 13 March 1981; Vol. 1000, c. 1119.]
Short of hyperbole, the facts are not in dispute. That is the policy. Conservative Members have argued that we ought not merely to have said what we would do but should have

stated the financial consequences of that action. That is what we did. We said that the cost of the GLC fares increase would be equivalent to a 6p rate. In the event, we levied a rate of 11·9p. The remainder was used to mop up part of the debt that was left to the Labour GLC by the Tory GLC and was necessary because the Government, in their wisdom, decided to reduce the rate support to London. The hon. Gentleman cannot have it both ways. The charge that Labour candidates at the GLC elections last year did not spell out what they would do and what the consequences of their actions would be cannot be made to stick.

Mr. John Hunt: The impact on the rates was soft pedalled. While there may have been some reference to an increase in rates, no impression was given that rates would rise to that extent, and certainly not by 11.9 per cent. for 6 months of one year.

Mr. Graham: If the candidates in the May 1981 elections, when speaking about the Tory Government's intention to reduce rate support grant, said that the cost of the GLC's fares policy would mean a 6 per cent. rate increase, they were wrong. It was almost double that. However, it is hypocrisy for Conservative Members to argue that Labour Members and Labour GLC members have deliberately deluded the London ratepayers. I acknowledge that many of them may not have read the small print or have listened to the argument. They may have decided to vote Labour because they liked the idea of a cheap, free, subsidised or more subsidised fares policy. I accept that, but that is the way of electors.
The Conservative Party has a lot to answer for when it makes the charge that we have been political. Why did the Labour GLC opposition, as it then was, decide that transport needed the type of treatment that it got?
Reference has been made to the importance of transport in the economics and budget not only of Londoners but of people throughout the land. Old-age pensioners are worried about the cost of fuel and their inability to make their pension last. For many of my constituents the worry is the cost of transport. I do not know the percentage of those who commute from Edmonton and Enfield, but a great many of them do and for them the cost of transport has loomed large.
However, the cost of transport has also to be seen in the context of other problems. What about the cost of the rates? Rates, as everyone knows, are materially affected by Government policies. The cost of housing, the cost of electricity, gas, telephones, food, the general level of prices and inflation are all influenced by general Government policies. Before and after the election the GLC agreed that those were the things about which it, as a council and a government for London, could do little. However, there was one thing that it could do something about and that was to drive down the cost of travel to Londoners.
There will be arguments tonight, and on many other occasions, to the effect that the GLC might have had the right policy—which it had—but it could have implemented it in different ways. But Conservative Members must understand that the Labour GLC considered that it had a responsibility to help to drive down those costs. Hon. Members have drawn attention to the extent to which subsidies are enjoyed, or endured, by cities in other parts of the world, and there can be little doubt that London is


at a disadvantage by comparison. I take the point that if one examines national overall expenditure, in other countries where the greater proportion of the subsidy is going either to large cities or capital cities, ipso facto, if the proportion of the GDP as a subsidy is the same as ours, there must be less going to the rural areas.
However, we are speaking here not merely as national legislators but with a special London interest. That is not a special plea; I am simply saying that we are trying to represent the views of our constituents. The figures have been given, although there has been some dispute as to whether they include certain things. Perhaps the Under-Secretary will say precisely what the subsidy is. In Berlin, it is 39 per cent., in Paris 44 per cent., in New York 55 per cent. and in Brussels 35 per cent. The Secretary of State will have to tell us precisely so that we may compare like with like. The Government's argument will be that we have not been doing so. If that assertion is made, the House must be told the precise figures for London.
The Labour Party, unlike the Conservative Party, believes that concessionary fares for the elderly are a proper use of local authority and Government funds. They encourage those who have reached the latter part of their lives to feel that the rest of the community is willing to pay some of its hard earned money in rates and taxes to make the elderly more mobile than they might be without the subsidies.
The hon. Member for Chislehurst (Mr. Sims) is right in saying that some individuals will apply for the pass merely because it is available and, having got it, will feel that they are clever in obtaining something for nothing. If the hon. Member for Chislehurst has made the same researches as I have on the cost of the pass to the GLC, he will know that the latest figure is £32 per head. That is the sum that the GLC has to pay to London Transport for every bus pass issued. It is a considerable sum. Of course, there will be people who either fecklessly or deliberately abuse a system designed with the best of intentions.
The last year in which the bus concessionary fares were handled by the boroughs was 1977. In Enfield, about 41,000—about 81 per cent. of those of the age required—applied for and obtained bus passes. Yesterday I inquired about the proportion of Enfield people who in 1981–82 have taken advantage of the scheme. Although I cannot obtain the precise figure, the GLC tells me that it was also about 80 per cent. of the required age. That is about 40,000 people.
If that figure of 40,000 people is multiplied by £32, it means that they enjoy a GLC rate-borne subvention equal to £1,280,000. The figure is increasing; this year or next it may be £1½million. I pay as much in tax and rates as anybody else in my constituency, but I consider that the money that I pay towards subsidising either the elderly or those who go to work is money well spent.
I shall read to the House one or two of the letters that I have received from constituents. My hon. Friend the Member for Tooting (Mr. Cox) said that he had received 130 letters on the subject of concessionary fares. I have not received as many—perhaps 20 or 30. The first is from a constituent who lives in Wellington Road, Bush Hill Park, Enfield, who wrote:
Dear Mr. Graham, Although, as a holder of a 'pensioner's pass', I did not stand

to benefit financially from the 'fair fares' scheme, I fully supported the principle and readily sent off my supplementary rate.
I think the public should not be allowed to forget that about half that rate was a sort of fine imposed on Londoners for voting as they did.
That is one man's point of view. I would not demur. The reactions of the Government and the Secretary of State are not wholly unaffected by the fact that there is a Labour GLC acting in the way that it is with public money—taxpayers' and ratepayers' money.
Another letter from a constituent is worth reading. He lives in Chiswick Road, Edmonton, and says:
Dear Mr. Graham, I have filled in the enclosed form because fare is fair. The present low fares benefit young and old alike, from the housewife making short journeys in bad weather to the shops to the man of the house on his way to and from work. I voted for a Labour GLC. Their fares policy is sense. Cheap fares for buses—I know, I have used them.
I have read those two letters to show that the old-age pensioners have been disadvantaged by the anomaly that has been well canvassed. That ought to be looked at and would have been, and I hope that it will be looked at by the GLC because undoubtedly there is a grievance. A number of people wrote to me about the effect of the supplementary rate. I received only six—three of them from associations who no doubt made their points on behalf of all their members, as we all tend to do—complaining about the cost of the supplementary rate for the fares scheme. I pointed out that the policy included more and said that if they would invite me to their next meeting I would be prepared to argue about them. My offer has not be taken up.
Like other hon. Members, I am disappointed that the Secretary of State has set his face against using the sort of opportunities that we say he should use to change the law to that which everyone, including himself, thought that it was before the decisions were made. Perhaps we shall be told, as has been hinted by Government Members, that many people knew all along—there was a deafening silence in 1981 before, during and immediately after the campaign—that the decisions were illegal or capable of being challenged.
Both I and my constituents are sorry that the opportunity has not been taken in this Bill, or that other legislation will not be promoted, to give the GLC the opportunity, if it wishes, to carry on with its policy. Government Members are entitled to say that I do not realise what the costs will be. What will happen at the May elections throughout London will be as much a reflection of the people of London being for or against Ken Livingstone, for or against the Labour-controlled GLC and for or against the travel and transport issue as it will be for or against the Government's performance during the past two and a half years. Although no one knows the result, I have a shrewd idea that the people of Edmonton and Enfield will not be as unanimous as Government Members may believe in condemning the GLC for carrying out its election promises in the manifesto.
The Secretary of State has got a nerve to cloak what he is doing. He is refusing to take action that will allow a local authority to carry out what it believes is its remit under the guise that the Government are acting in the best interests of either the taxpayer or the ratepayer. A Committee is considering the Local Government Finance Bill. It is a follow-on from the previous Local Government, Planning and Land Act 1980. This Government more than any other


have not hesitated, under the guise of giving democracy, freedom and entitlements to local government, to take away from local people the opportunities through their elected representatives to do what they consider to be right and proper. The Government have acted thoroughly undemocratically, not only on this issue but on many others. When they are tested, not only at the local elections but at a general election, the people of Enfield and Edmonton will treat them with the contempt that they deserve.

Mr. Sydney Chapman: Not for the first time, I have the opportunity as well as the pleasure of following the hon. Member for Edmonton (Mr. Graham) in a debate on London. Although it will come as no surprise to him that I disagree with many of his points, I share with him a welcome to the Bill, which puts beyond doubt the GLC's right to make travel concessions available. I also join him in saying how I welcome the opportunity to talk about public transport in London because I believe—as I am sure hon. Members on both sides of the House believe—that a successful public transport system for London is essential to the well-being of Londoners and of many hundreds of thousands, if not millions, of people outside London.
I concede immediately that a prop of the Labour Party candidates' campaign in the GLC elections was that there should be a cheap fares policy. However, there was no attempt to tell Londoners what that cheap fares policy would cost. It was not just a policy of reducing fares by 25 per cent.—although in the end the average was 32 per cent.—but a deliberate policy also of freezing those reduced fares for four years. I concede also that Mr. Livingstone, in one sense, is on to a winner because not all London electors are ratepayers. Indeed the majority of London electors are not ratepayers, so it was relatively easy to pass on a popular policy for the majority because the bill would be picked up by the minority.
I have considered the figures carefully and I agree with my right hon. Friend the Secretary of State, who assesses that, had the cheap fares policy continued, it would have cost the ratepayers £1·2 billion to the end of the financial year 1985–86. I know that those figures are disputed by the Opposition, but that is my judgment. That figure of £1·2 billion is, coincidentally, exactly the total subsidy paid to public transport systems throughout Britain this year.
That figure is a terrible burden on London ratepayers. The GLC precept on the boroughs for the next financial year would have trebled against the comparable figure for 1981–82, and the public transport element in the precept would have increased tenfold. To many people there is an easy answer. They wish to have a greatly subsidised public transport system in London but they would also concede that it is unfair that the ratepayers must meet the bill. They then go on to say that the taxpayers should meet the bill. However one considers the matter, it will cause inflation. If we increase the fares, the rates, income tax or other taxation that will cause inflation, so we are in a Catch-22 position.
I accept that, but what I cannot advocate is that, even if we suggest to the Government, as Londoners wishing to have those benefits, that the taxpayer and not the ratepayer should pick up the bill—incidentally the

taxpayer is picking up part of the bill in any case—a policy that will cost £1.2 billion by the end of 1985 should have a priority' in Government expenditure.
When I am in my constituency and other constituencies I see the desperate need to spend more money on, for example, machinery in a hospital or to give retirement pensioners the maximum possible increase that the nation can afford. A figure of £1.2 billion around the taxpayers' neck to pay for cheaper fares on London Transport cannot be high on my list of priorities. Of course, as the economy expands and Britain becomes richer, I would wish to see a greater proportion of subsidy being made available for our public transport systems.
A slightly more parochial question is whether it is good to give a greater subsidy to public transport in the metropolis because it would have beneficial environmental and social spin-offs. I ask immediately whether it will relieve traffic congestion in the metropolis. I appreciate that the issue can be clouded because of the recent intermittent rail strikes. A useful result of the six months of the cheap fares scheme will be that we will be able to make certain comparisons. I hope that statistics are being collected. I understand the cheap fares scheme has resulted in an increase in passenger mileage of about 8 per cent. I know also that it was the GLC's forward estimate that the number of motorists bringing their cars to London would be reduced by only 1 per cent. Even that percentage, I believe, will prove optimistic and it will not be as much as that. Perhaps we shall be able to have the factual evidence shortly.
It is not the people who would otherwise come into London by car coming by public transport, but people who already use public transport using it more that is the main cause of the increase of 8 per cent. in the total of passenger mileage. Sir Peter Parker will accept or refute this point but I understand he made an estimate that the British Rail lines coming to London would lose revenue of about £100 million as a result of people switching from British Rail to buses or, more likely, the underground.
Therefore, there is no strong evidence that any significant policy of reducing fares will result in the environmental advantages for which we hope. The evidence is there to be confirmed by what has happened in South Yorkshire, where there has been a cheap fires policy for five years. It has. not resulted in any reduction in private traffic on the roads, but—perhaps this is a good consequence—people who use public transport anyway have used it on more occasions.

Mr. Robert Hughes: The hon. Gentleman is arguing a cogent case. It has never been argued that the GLC's "Fares Fair" policy was based on one facet of transport policy. One of the difficulties in measuring the reduction in car traffic is that there is a natural progression, which is accelerating, of more people using cars. Therefore, it is never possible to isolate the decrease in the number of car journeys that has resulted from the cheap fares policy. The GLC wished to make available to British Rail about £50 million to assist it with the travel scheme, so that there would be more of an integrated British Rail-London Transport system. Unfortunately the Government prevented British Rail from accepting that because it would have affected British Rail's EFL.

Mr. Chapman: I accept: the first part of what the hon. Member said.
I shall rephrase my words. We are all interested in preventing all but necessary increases in the number of private cars going to London. If we can do that by positive rather than negative means, that is the route to be taken and encouraged.
However, an environmental problem has arisen in my patch of the woods as a result of the cheap fares policy This is my parochial point. As a result of the cheap fares policy there has been greatly increased congestion and pollution in my constituency at the end of the Northern line. Hundreds of people have come to London from outside and have parked their cars all day in my streets and byways, causing congestion, nuisance, pollution and traffic jams. They are the people who are taking advantage of the subsidy system at the London ratepayers' expense.
Whatever case there may be for a cheap fares system or greater subsidies for public transport in London, we must accept that our capital city has two unique features. One is the hundreds of thousands, if not millions, of commuters who earn their living in London, but live outside the Metropolis. They should be required to pay a fair share of the costs of running London Transport. Secondly, I do not need to remind hon. Members of the millions of tourists who visit the city. They are welcome, but my ratepayers do not see why they should subsidise those people, who can afford to come to our glorious capital and wonderful country to see our beautiful sights.
Therefore, it is a relevant factor that whatever subsidy should be given to London—we can argue about its level—there is a greater case for a marginally greater subsidy being met by the taxpayer nationally rather than by the local ratepayer. That is a fair point that I ask my right hon. Friend the Secretary of State to consider.
It saddens me to say that I utterly deplore what I believe to be the disgraceful use of £250,000 of ratepayers' money to propagate Mr. Livingstone's campaign. I am always glad to see my picture in the paper. For the first time, it appeared in The Standard. I am the youthful, good-looking person at the top right-hand corner. I am always grateful for such free publicity. The photograph is muzzy enough to take away the age dawning on my visage.
It is disgraceful, particularly when money is tight and when we are going through a world recession to squander—I do not believe that it is an exaggeration to use that word—£250,000 on a petty, party political campaign. I do not know who is responsible for that. Presumably the GLC has a collective responsibility. It should stand condemned for that action.
My constituents ask why, when fares were reduced by 25 per cent. less than five months ago-or 32 per cent., as we were reminded—they have to be doubled next month. Whichever way one looks at it, a strong ingredient must be the gross inefficiency and overmanning in London Transport. It is nothing to do with the Law Lords. I do not believe that our constituents are so foolish as not to realise that the entire blame lies at the door of the Labour GLC for this sorry state of affairs.

Dr. Brian Mawhinney: I wish to tell the House that I am one of my hon. Friend's constituents, who is well satisfied with the work of his local Member of Parliament. My hon. Friend is speaking entirely for his constituents at this time.

Mr. Chapman: My hon. Friend has great insight. I look forward with interest to his meteoric political career.
I indict Mr. Ken Livingstone because I believe that he has perpetrated a cruel hoax on the people of London. He has pretended that they can have a cheap public transport system without having to pay for it. One cannot have a cheap fares system without swingeing increases in taxes, to be met from somewhere. On this occasion they nearly had to be met and, in fact, they will have to be met by the hard-pressed London ratepayer.
The hon. Member for Edmonton read out extracts from two letters from his constituents. I wish that he could see the post bag of letters that I received, mainly from elderly people on modest incomes, who did not know how they would pay the supplementary levy.
My indictment of Ken Livingstone is that he is practising and using political power with no sense of responsibility. The people of London will see through that. We can argue about policies openly and honestly. However, hon. Members know that whether it is Government at national, local town hall or county hall level, the buck stops with us. We must make decisions. We must balance the interests of the consumer and the traveller with those of the ratepayer and the taxpayer. There are no easy solutions to the problems. Ken Livingstone tried to pretend that there was, without telling Londoners about the bill that they would have to pay. That is why he stands indicted and that is why the people of London will not forgive him.

8 pm

Mr. Frank Dobson: One of the lessons that we might draw is that, if the Secretary of State for Transport and the Under-Secretary of State are to be taken seriously, the debate and Bill are totally unnecessary.
On 17 December, the Prime Minister welcomed the House of Lords judgment in the Bromley v. GLC case. The right hon. Lady said:
I welcome the clear and unanimous judgment from the House of Lords and congratulate Bromley on having taken steps that have clarified the position for London's ratepayers."—[Official Report, 17 December 1981; Vol. 15, c. 447.]
Whatever else the House of Lords judgment did, it made little clear and it did not clarify the position. Taking their cue from the Prime Minister, as all members of Government must, successive Ministers denied from the outset that any change in the law affecting London Transport was necessary. They repeated that time and again.
The first reference was made by the Under-Secretary of State for Transport on 18 December, the day after the House of Lords judgment and the Prime Minister's welcome of the clarification. The hon. and learned Gentleman said:
There is no doubt about the validity of the concessionary fares policy. The GLC and London Transport have clear authority, under section 138 of the Transport Act 1968, to grant concessionary fares to pensioners.
If that were true, why have we got the Bill today? Why is the Bill necessary?
Later in the debate, the Under-Secretary of State for Transport said:
I have scotched one fear already, that the judgment affects concessionary fares to pensioners. They are not affected by yesterday's judgment because concessionary fares are covered by different legislation."—[Official Report, 18 December 1981; Vol. 15, c. 562–580.]


On 21 December the Under-Secretary of State for the Environment, the hon. Member for Ealing, Acton (Sir George Young) said:
There is no threat to London pensioners' free fares. These are expressly provided for in a separate statute. My hon. and learned Friend the Under-Secretary of State for Transport made that clear … Therefore, there is no question of frightening London's pensioners into thinking that their free fares are at risk."—[0fficial Report, 21 December 1981; Vol. 15, c. 804.]
In case any hon. Member taking part in the debate on 21 December had not been present on 18 December, he repeated what his hon. and learned Friend the Under-Secretary of State for Transport had said, which I have already quoted.
The next day, 22 December, there was slight shift of emphasis. The Under-Secretary of State for Transport was a little more careful when he said:
But a week after the judgment the first shock horror stories in the newspapers or the more reasoned comments in this debate have not persuaded us that anyone has yet established any basis for rushing into legislation."—[Official Report, 22 December 1981; Vol. 15, c. 926.]
Nevertheless, this small Bill seeks to put right what the House of Lords did wrong. The fact that the Bill is necessary demonstrates that all the references made by the Government on this matter—until the Secretary of State announced to the House that he intended introducing this small measure—have been wrong and totally misleading. They have been based on the calculation that if they vilified the present Labour-controlled GLC as scare-mongers, that charge would stick. It was not scaremongering. From the first day, the GLC said that the judgment of the Law Lords had put the concessionary fares scheme in jeopardy. It did, and the living proof of that is this small Bill, which, like all Opposition Members, I welcome.
We want to keep London's concessionary fares scheme, because it was a Labour scheme. The defector to the Social Democratic Party, the hon. Member for Hackney, South and Shoreditch (Mr. Brown)—who has now left the Chamber—described in detail the way in which the scheme was introduced. However, I suspect that if his performance was typical, it was a bit like the St. Crispin's day speech in Henry V, in that he remembered with advantage what deeds he did that day.

Mr. Eggar: I assume that the hon. Gentleman's description of his ex-hon. Friend's performance also applies to his performance when he led for the London Labour Members.

Mr. Dobson: We do not have to say everything that we think—not even in the House. The London Labour Party introduced the scheme, London-wide. It is precious to the Labour Party in London that it did so. As a result, the Labour-controlled GLC was worried that the Law Lords had put that scheme in jeopardy. It is interesting that there are no concessionary fare schemes for pensioners in some parts of the country. Can the Minister name any Labour-controlled authority that does not have a concessionary fares scheme? Although the Department does not keep sufficiently careful statistics for my proposition to be proved, to the best of my knowledge it is only Tory areas that do not have concessionary fares schemes. Because Tories cannot be trusted to introduce concessionary schemes, we believe that there should be a national scheme so that pensioners throughout the country can benefit from the type of scheme introduced for London's pensioners.
The last GLC election was fought and won—or, for the Tories, fought and lost—almost exclusively on the issue of lower fares. When Conservative Members bleat and groan that the cost of the scheme was not given sufficient prominence in the election campaign, they should remember that they have only themselves to blame. They spent much time pointing to the scheme's cost for ratepayers. They had The Standard bleating away on their behalf every other day, as well as most of the other newspapers. Therefore, they have only themselves to blame if they did not convince the public that the scheme would not be worth while.
The scheme was worth while and worked well. In the first few weeks of its operation, there were 10 per cent. more journeys, which is equivalent to no fewer than 400,000 extra bus trips and 140,000 extra tube trips per day. The scheme was successful. The number of passengers carried per bus mile increased by 12 per cont. and the number carried per underground mile increased by 6 per cent. That was the effect in the first few month of the scheme.
Ticket handling arrangements in London tube stations were eased because of the simplification of fares as well as their reduction, which were also prejudiced by the House of Lords judgment and the right hon. Gentleman's failure to introduce a Bill to put matters right. There was also a substantial increase in the use of ticket machines—which, by his standards, leads to greater efficiency—and there was a considerable reduction in the queues at booking offices. Those were all substantial improvements in efficiency.
A much higher output per man and woman employed on London Transport resulted from the reduction in fares. There was a greater improvement in the number of passengers per vehicle on the roads and on the underground as a direct result of Labour's policies. Then the right hon. Gentleman has the effrontery to say that, because London Transport appointed 106 bus drivers, 161 bus engineers, 111 trainees, 39 train men, and 56 tube engineers—people at the sharp end and all directly involved in providing the improved service—that was an increase in inefficiency. Nothing could be further from the truth. There was a massive increase in the efficiency of London Transport, judged by any means that he may choose, during the period of lower fares.
Presumably, when the right hon. Gentleman talks about inefficiency resulting from the additional staff, he is referring also to the 72 extra railway police who were appointed to the tube system during that period. He should be ashamed to say that. While the Home Secretary was mooning around, and his own predecessor did practically nothing to reduce the violence and vandalism on the tubes, the Labour-controlled GLC appointed more people, which the Tories had promised to do, but never did. So much for the party of law and order. The Labour GLC appointed 72 extra underground police. Yet, that was denounced as inefficient by the representative of the party of law and order. It is poppycock and hypocrisy to do so.
Then there is the question of the rate burden. There has been a substantial increase in rates with the supplementary rate. However, even Conservative Members must admit that the bulk of the increase in the supplementary rate resulted directly not from the fares reduction but from the clawback that the Minister forced and also from having to pay off the deficit that the prudent Cutler had built up during the previous year. Those are the plain facts.
The £180 million increased cost to the ratepayer worked out at 52p per week per domestic ratepayer. Most domestic ratepayers got a very good bargain in the reduction in fares, compared with that. Moreover, the burden on businesses was equivalent to 58p per employee per week. That was all it amounted to, but it was useful to employers because it reduced the pressure for pay increases to meet ever-increasing travel costs. I suspect that many of the employers who were bleating will regret having helped Bromley borough council to bring its case.
The fares increases caused by the House of Lords judgment, because of the Secretary of State's failure to act, are not the only damaging aspects of the judgment. Already this week reductions are being introduced in services by London Transport. Those reductions in services are a direct result of the House of Lords judgment and the legal opinions that are being given by legions of lawyers. Lawyers are almost the only people to profit from this loony decision by the Law Lords. Perhaps I can almost declare an interest here, because I represent Gray's Inn and Lincoln's Inn. I suspect that a considerable but limited number of my constituents in Lincoln's Inn and Gray's Inn are practically the only beneficiaries from the judgment, in that they are giving counsel's opinion to almost everyone who runs even one rickety old bus as a result of the House of Lords judgment. We can do without lawyers getting money out of the system. I am more concerned to reduce expenditure and to put more money into the pockets of my other constituents, because lawyers have always managed to look after themselves.
Many of the worse-off of my constituents work in catering trades, in hotels and restaurants, and in other central London activities which go on late at night. They, too, will suffer as a result of the House of Lords judgment and the Secretary of State's failure to act to put the law back to what even he thought it was before the Lords made their pronouncement. They will suffer because night buses and late bus and tube services will be the first to be cut. It will be no use the Secretary of State and his right hon. and hon. Friends bemoaning the increase in violence in London late at night if they have been party to taking away the public transport system on which so many people rely. One result will be an increase in attacks of a racist nature. [Interruption.] If the hon. Member for Paddington (Mr. Wheeler) thinks about it, he will realise that I am right. Can he tell the Bengalis working in restaurants in his area that they will be safer walking home at night than going on a bus or the tube? He knows that he cannot say that, just as he knows that they are the most vulnerable and most at risk.
There will be a threat, too, to the security of the many women who work in restaurants, theatres and clubs. They will either have to pay a vast sum for a taxi, or walk home because of the absence of the bus and tube services to which they have been accustomed. As a result, there will be a reduction in the living standards of many people who make inner London the place where people go for entertainment late at night. Some of those people will be subjected to physical violence as a result of the ludicrous policies of the Government and the ludicrous decision of the House of Lords. It is shameful that some of the most badly paid and vulnerable people in our society will be put at risk as a result of this case. I do not believe that a

second's thought has been given to their welfare either by the Tory Opposition at county hall or by the Front Bench Tories here.
I am most perturbed about the welfare of many of my constituents who fall into these categories, and I am sure that other central London Members feel the same. It is not just a matter of fares or rates. The way that many people now get home at night will no longer be available to them. We should seek to protect those people, as well as Bromley's benighted ratepayers.

Mr. Tim Eggar: It is always a pleasure to speak after the hon. Member for Holborn and St. Pancras, South (Mr. Dobson). He is not noted for representing all his constituents. I noticed that he failed to speak for his constituents in Gray's Inn and Lincoln's Inn. He seems to pay no attention to the verdict of his constituents recently given in the GLC by-election when they clearly and unequivocally voted against the London Transport—

Mr. Dobson: Will the hon. Gentleman give way?

Mr. Eggar: No, the hon. Gentleman spoke for a good 15 minutes—

Mr. Dobson: But it was not my constituency.

Mr. Eggar: If that is so I am sorry, but it was obviously the neighbouring constituency up the road, and the lesson is the same.
I apologise for not having been present throughout the debate, as I was unfortunately in Committee upstairs.
I unreservedly welcome the Bill. It is incredible that the Labour Party, which during the 1977 GLC election circulated the completely unfounded, misguided and untrue rumour that the Conservative GLC was about to remove the free bus passes from pensioners, had the nerve when it formed the 1981 GLC Administration to be the first to charge pensioners for those passes. That is what the supplementary rate amounted to.
One of my most moving experiences as an hon. Member occurred when an elderly pensioner, practically in tears, visited me at my advice centre, accompanied by her daughter. She said: "Mr. Eggar, I just do not know what to do. Today at the civic centre in Enfield I paid my supplementary rates bill. It amounted to all my pension payment for this week. But for my daughter I just do not know how I would be able to live this week." She was, of course, entitled to a rates rebate, but she did not understand or appreciate that, and nor did her daughter. That is the sort of agony to which the Labour GLC's policy has subjected some of my constituents. It is no good the hon. Member for Aberdeen, North (Mr. Hughes), whose constituency is many miles away, shaking his head. He has not been on the receiving end of such harrowing experiences.
Labour Members have told of the large numbers of coupons that they have received. I received 22 coupons and about three letters. I had over 150 letters from my constituents complaining about the supplementary rate when that was introduced, and many of those complaints were from firms which specifically said that if that rates increase was not revoked they would lay people off. That is the reality of the GLC fares policy.
I have been shocked, as have other hon. Members, by the lengths to which the Labour GLC has been prepared


to go. Not content with spending over£100,000 on The Londoner, which contains pure party propaganda by the Labour GLC, it has now come forward with a £250,000 party propaganda campaign in the press. That campaign asks the recipients of letters to write to their Members of Parliament. The hon. Member for Holborn and St. Pancras, South laughed when I said "party propaganda". However, he is directly contradicting Mr. Dave Wetzel. Mr. Wetzel was quoted in Time Out, on the Lords judgment, saying:
The judgement has given the Labour Party the best spur we could have hoped for before the local elections next May…We are going to spend £250,000 on a campaign. It's a real fillip for us—the best thing that could possibly have happened".
If that is not admission that £250,000 of ratepayers' money is being spent on a political campaign, I do not know what is. However, what is more interesting is that Mr. Wetzel admitted in that interview that the "Fares Fair" policy was not electorally advantageous to the Labour Party. Far from it. It was electorally disadvantageous and he believed that that judgment would help the Labour Party. That is how low the cynical and extremist group in the GLC has stooped.

Mr. Clive Soley: The hon. Gentleman is circulating against Dave Wetzel a rumour that is grossly unfair and I say that as an hon. Member who represents the area in which he works. Whatever the context or background of that quote, Dave Wetzel and Ken Livingstone put a great deal of effort, thought and concern into the best fares structure for the people of London. To use abuse of the sort that the hon. Member for Enfield, North (Mr. Eggar) expresses is grossly unfair. If he examines the background of the matter and if he has a sense of fairness, he will be the first to withdraw his remarks.

Mr. Eggar: The hon. Gentleman had better restrict himself to his remarks on Northern Ireland. I was simply quoting Mr. Wetzel. If he denies that that quote was made in Time Out perhaps he will say so.

Mr. Soley: No, I agree that he said it.

Mr. Eggar: I thank the hon. Gentleman.
Let us examine what the Labour Party's policy has achieved. We are told that it may possibly have reduced car traffic by 2 per cent. My constituents have not experienced any difference in the amount of traffic on their roads and, in certain areas, they have observed a significant increase because people from Hertfordshire and Essex have driven in through Enfield and parked around the only tube station near my constituency—Oakwood—which enables them to benefit from the cheap fares. It is marvellous. They clog our roads, use our subsidised transport and travel into London. That is fine for them, but my constituents, the Enfield residents, must pay for the commuters' subsidised journeys.

Mr. Robert Hughes: Is the hon. Gentleman seriously suggesting that people drive a dozen or 20 miles simply for the pleasure of travelling on the London underground and then returning home without spending money with private concerns in London? Does he realise that if people travel to London more money is spent in shops and with industries than would otherwise be spent?

Mr. Eggar: The hon. Gentleman should be careful in his remarks. He seems to be completely unaware that people in Hertfordshire and Essex commute to London on

a regular basis. It happens to be cheaper for them, because of the fares reduction, to stop using British Rail. to drive in and to clog up the streets in Enfield and to receive a subsidised tube journey.
Whom has the policy benefited? It may possibly have benefited some Opposition Members' constituents in inner London.

Mr. Wheeler: That is not the case.

Mr. Eggar: I always stand corrected when my hon. Friend the Member for Paddington (Mr. Wheeler) makes a remark. Of course, if he says that that is not the case I accept it. However, my constituents have not benefited. I asked them publicly, through a local newspaper, to write to me if they had benefited from the fares reduction.
I received two—only two—letters from constituents stating that they had benefited. The reason is that the tube station is six miles away and my constituents would have had to take the bus to get to it. Most of them travel by British Rail. Opposition Members argue that the GLC fares policy has not had time to work. If it had operated much longer, it would have decimated the London suburban rail service. People would have moved deliberately from British Rail to the tube. My constituents would have been forced either to take a bus to the nearest' tube station or pay substantially higher British Rail fares for worse services. That is the reality of what the GLC policy has meant for my constituents.
There are even worse effects. I have already referred to the number of letters that I have received from employers relating to the supplementary rate. It is estimated, I think on pretty good grounds, that the supplementary rate throughout London has cost 13,000 jobs—

Mr. Dobson: Who made the estimate? Does it not fly in the face of the views of the deputy director-general of the CBI, who, in a letter to my hon. Friend the Member for Blackburn (Mr. Straw), stated that it was virtually impossible to quantify the loss of jobs through rates and who moved away from his earlier unsubstantiated assertion that a substantial number of jobs had been (lost as a result of rates increases? I suggest that the hon. Gentleman is conjuring figures out of the air and that he would do better to stick to the effects on the domestic electors of Enfield.

Mr. Eggar: The London chamber of commerce survey stated that 38 per cent. of all companies in London had already shed staff and that nearly 17 per cent. of companies were moving jobs outside London because of the mounting rates bill. I am extremely worried about the general level of rates in London not least because I know that firms in my constituency could easily move out to Hertfordshire and Essex where rates are considerably lower. This would mean a net loss of jobs not only among my constituents but among constituents of Labour Members who travel up the Lea Valley railway line to work in my constituency. [Interruption.] It is no laughing matter. I find extraordinary the attitude taken by the hon. Member for Workington (Mr. Campbell-Savours).
I turn now to the cost of the policy. Under the supplementary rate, individuals would have been paying £1·31 a week to subsidise London Transport as against 13p under the Conservative GLC. Next year, there would have been an increase to £2.65 a week or £140 a year as against a cost under the Conservative GLC of £6.76 a year.
The experience of the past few months has made me wonder whether we have really got the right basis for the structure of London Transport. There is an argument, it seems to me, for appointing a London transport authority with representatives from the boroughs in particular as well as from other organisations. Ultimately, the transport authority should be responsible not to the GLC but to the Department of Transport. Any move to set up such a transport authority should be accompanied by a long-term selective subsidy commitment from the Government. Opposition Members seem to forget that the subsidy rate for London Transport after 21 March is predicted to be around 50p for every £1 in fares increase, at about the same level of 30 per cent. that has been provided for the last five or six years. That shows no change. I am not advocating a change in the absolute level of subsidy.
If a London transport authority is to be established, the whole role and future of the Greater London Council is called into question. Seen purely from an Enfield perspective, the GLC, under the control of whatever party, is nothing but a nuisance. On major schemes over which it has control, such as the north-south road in my constituency, it consistently gets the wrong answer. On minor schemes, it simply holds up the practical proposals put forward by my borough council. My constituents see no future for the GLC in their area. I hope that my right hon. and hon. Friends will consider the possibility of radical reform. This is a good Bill, it will be welcomed by all my pensioner constituents and it sets right the grave injustices done to them by the Labour GLC.

Mr. Sydney Bidwell: I bring enlarged credentials to the debate. I am the only London Member of Parliament on the Select Committee on Transport and I am sponsored by the Transport and General Workers Union which has a vital interest in the continuity and success of the London transport system. Also, I was a railway worker many years ago and an active member of the National Union of Railwaymen.
The debate has been beneficial because it has brought out many germs of truth from Members on both sides of the House. I do not maintain that everything that the Labour Party does here or in the GLC is perfect. The GLC knows that that is my attitude. The build-up to the present GLC policy has been a hard, long road.
I am glad to have heard the opening speeches from both sides of the House and many others, but I am sorry not to have heard them all. As the erstwhile chairman of the London group of Labour Members of Parliament and a former member of the London Labour Party executive for some time, the hon. Member for Hackney, South and Shoreditch (Mr. Brown) has been heavily involved in these discussions, perhaps more deeply than I have as my constituency is on the western fringe of London while he is involved in problems at the centre.
I do not know whether the hon. Member for Enfield, North (Mr. Eggar) knows that the Select Committee has been engaged in a long study of the traffic mess in London. I say "mess" because I think that all hon. Members agree that that is the case and that there is a need for substantial change. The argument is about how to make those changes in the interests of all kinds of people, as well as the environmental interest to which the hon. Gentleman

alluded. If one deliberately encourages people to use public rather than private transport, one inevitably encounters the problems to which he referred.
It was the policy of the previous Labour administration, with a smaller Left-wing bias, to build car parks on the edge of the Greater London area. The plan was for those living outside London to make part of the journey by car and the rest, in the congested close suburbs and inner city, by public transport. It may be of little use to go, as members of the Select Committee have done, to Denmark, San Francisco, Toronto, Hamburg or Munich to compare their public transport systems with ours when London is a great sprawl and one of the biggest capital cities in the world.
We also visited Tyne and Wear, where the metro and integrated bus system is still developing and is causing some setbacks and grief, and people are moaning about changes on the Gateshead side. When I asked the director-general how he would set about solving London's transport problems, he said that we would first have to define what was meant by London. The hon. Member for Enfield, North touched on this when we spoke of the new concept of a London transport authority.
This is a limited Bill. In my judgment, it is a face-saving Bill for the Government. As my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) said, we were given assurances not long ago about the threat to old people's free transport in the off-peak period. Whether they support the Labour, Social Democratic, Liberal or Conservative Party, old people cherish that great advantage which enables them to move around, to visit relatives and to go to meetings. I have often accompanied them, and I know that they must always keep an eye on the clock because they know—and, I believe, generally accept—that they cannot travel at peak times. There has been some argument about this. My neighbour, the hon. Member for Ealing, North (Mr. Greenway), would apparently like to extend the validity of free transport, but he cannot take that view and at the same time support reductions in services because pensioners would then be queuing with the rest of the population. We must consider the realities of what is already happening and what will occur on 20 March when workers stage a demonstration day of stoppage and on 21 March when the considerable increase in fares starts to bite.
Just as there are many unknown factors in reducing fares and in determining the level to which they should be reduced, there are unknown factors in the situation which will arise after 21 March—the extent to which people will cease to travel by bus and by tube and return to using cars, the extent to which they will make fewer journeys or the extent to which the trains will be filled.
There are two aspects of productivity. It may mean running more vehicles and services with existing workers, or running the same services with fewer workers. In this respect, I greatly resented the suggestion made by the hon. Member for Chipping Barnet (Mr. Chapman), who is normally a very rational Conservative. Certainly that is how I recall him in his previous period in the House when he served on another Select Committee with me for some time, and since his return when I think that he has been regarded by some of his colleagues as a rather wet Tory. Nevertheless, I greatly resent his references to gross overmanning.
When the subject of productivity was raised, the union representatives concerned, as well as Sir Peter Masefield,


chairman of the London Transport Board who should know what he is talking about, and Mr. Bill Morris, the national passenger officer who caters mostly for the bus workers, all agreed that they were open to discussing the introduction of greater productivity. Sir Peter says that the structure of the underground system presents serious impediments to working those stations with fewer men. New equipment involving more capital expenditure is needed, and it cannot be introduced immediately. Therefore, Sir Peter has problems.
Sir Peter told the Select Committee only a few days ago that he welcomed the GLC's fare-cutting policy. In spite of all the headaches and tears, and in spite of the Law Lords judgment, he thought that in all the circumstances the GLC decision was correct. He is greatly respected as a former chairman of the British Airports Authority, another matter about which he knows a great deal, and for the management of London Transport. He works closely with the chairman of the GLC Transport Committee, Mr. Dave Wetzel, who also gave evidence recently.
I am surprised that the Conservative Members who have taken part in the debate have not fastened on the fact that, although the main plank in the Labour Party's programme at the GLC election was a 25 per cent. cut in fares, in fact cuts of 32 per cent. were made. I asked Mr. Wetzel whether he thought that that had played a large part in the Law Lords eventual judgment on the representations made to them by Bromley. He replied that he did not think that it made much difference.
The cheap fares policy was a lopsided policy in a sense, in that it could not benefit commuters in the southern part of London. That is one reason for the sense of grievance, which I well understand, as a transport man. Years ago, the London Labour Party talked about charging no fares on London buses or the Tube. My union stepped in to scotch that idea. The hon. Member for Hackney, South and Shoreditch (Mr. Brown) will remember that. The union plays a big role in financing the London Labour Party, and it wants to know where its members' wages are coming from. It is a balancing act.
I hope that I have refuted the argument that the workers are not amenable to greater productivity. They are, if additional wages go hand in hand with the increased productivity.
We cannot make an exact comparison with other systems. We looked at the metro system in Newcastle, where a woman pushing twins in a pram has no difficulty. There are no escalators, and she can push the pram straight on to the train. The development in Newcastle is a great boon to the people there. There is a policy of cheap fares on the buses, and an attempt is being made to work out an integrated system.
We cannot do that overnight in London. It is a matter of social evaluation. The rating system is an undesirable taxation system. The Government talk about Green Papers and alternative regional taxation methods—possibly a sales tax, which I understand the Prime Minister favours.
The speech of the hon. Member for Ravensbourne (Mr. Hunt) showed that he does not know about the problems in other countries. He thought that it was all a case of central Government heavily subsidising a cheap fares policy in the capital. It is not like that at all. It is a regional taxation system that subsidises the major cities and conurbations, whether in North America or in comparable Western European economies. They work out their own systems, but they are all moving in a similar direction. The

Secretary of State for Transport must move in that direction. He can draw lessons from Newcastle and South Yorkshire, and from what has happened in the short period since the GLC cheap fares policy has been in operation. Most of all, he can draw lessons from the representations being made to us. Again it is a balancing act. I concede that the reaction depends upon the kind of area one represents.
The hon. Member for Ealing, North, whom I know well as my neighbour, has alluded to the reactions he is getting. I bet they are not from Northolt, but they may well be from the Pitshanger ward which he is at serious risk of losing under redistribution; he may even lose the Ealing, North seat at the next general election. To be honest with the hon. Member, as we always have been with each other, these are the facts of life. The responses from Bromley and the action taken there are not surprising, nor is it surprising that the representations we are getting are different.

Mr. Greenway: I am getting some reaction from Northolt. My remarks were partly addressed to that. Nothing is settled about the future of the constituency boundary of Ealing, North. The matter is with the Boundary Commission.

Mr. Bidwell: The boundaries of my constituency will remain the same, so I am not worried.
My wife, who is my secretary, thinks that I should reply to all the letters I receive. That is no mean job because the representations will increase to a crescendo as we get nearer 21 March. My reply is as follows:
Thank you for your recent communication. I am, as a Labour MP, entirely in agreement with you and shall do whatever I can to get a cheap fares policy back again for Londoners.
The problem is how to get cheap fares back again.

Mr. Eggar: rose—

Mr. Bidwell: I am about to bring my speech to a close.
We may need more Post Office staff. This point should probably be raised on a point of order with the occupant of the Chair. Some communications are addressed to the MP for Northolt or the MP for so-and-so and the Post Office is putting on them "Mr. S. Bidwell". I am not the MP for Northolt, which is in the constituency of the hon. Member for Ealing, North. I am better known than he is, but I am passing them all on to him.
In my family there are those who will struggle to go by motor car. They have appreciated the cheap fares, but they are talking about returning to the car, which is unfortunate. This is a twin-pronged matter. First, we have to address our minds as Londoners to providing facilities for people to get about in safety, as has been emphasised in the debate. Secondly, we have to persuade people and not hit them with bludgeons.
In the Select Committee we are talking about putting some kind of illegal parking mechanism on the wheels of cars. We want to persuade people that it is nicer to travel with others in public transport. It is not a party matter. The two Sir Peters of the British Railways Board and London Transport favour a new bigger area, with a London and South-East authority, but that would bring in all the county representatives. Inevitably, unless the GLC is abolished, as some Tories wish, it would have to be brought in as well. Perhaps then we would get the continuity of road, rail and public transport policy which is desperately needed but which we have not had for the past few decades because of the political shuttlecocking and arguments.

Mr. John Wheeler: In common with other hon. Members, I welcome the Bill. I regret that it became necessary, but we have discussed the reasons for that over the past few hours.
The decision of the Judicial Committee of the House of Lords was a godsend to the GLC. There is no doubt that the impact of the supplementary rate on domestic and commercial and industrial ratepayers in London was great. It was obvious to many in the Labour Party in London, especially the Labour borough council leaders, that the policy of reducing fares by 25 per cent.—as we have heard, the actual reduction was 32 per cent.—and holding them down for the next four years was creating a serious problem.
There is no doubt that the cost of the reduced fares policy had not been properly calculated. Nor had the cost been put before the people of London during the GLC election campaign in May 1981. If people had been aware that reduced fares would cost about £1,200 million in the outturn, I do not believe that there would have been any vote for such a policy. It is worth remembering that about 60 per cent. of electors did not vote in the GLC elections last year. All the polls and surveys show that most people have no idea what the GLC does.
We cannot ignore the impact of rates on London. Although some would like to gloss over this matter, the fact is that in one of my constituency wards the average domestic rate paid by someone who has a flat is about £1,000 a year. In the cheapest ward in my constituency the average domestic rate is between £200 and £250 a year. Recently, a retail store closed. The directors made it clear to me that the rates bill of £250,000 was one of the reasons why the store had to close. Taking Oxford Street as an example, the rates bills are about £2 million a year for each store. These businesses will be closed and relocated unless there is a reasonable and balanced approach to the impact of rates on commerce in London.
Those who live in central London are being pushed out. The latest survey of the Office of Population Censuses and Surveys shows that about 23,000 have left the city of Westminster during the past few years. The impact of rates, rents and service charges combined to achieve that.

Mr. Campbell-Savours: And high fares.

Mr. Wheeler: A reasonable approach to the level of the rates in London is necessary. It cannot be said that that is the approach considered by the present GLC, because it believes in high expenditure. Its policies result in more rates being levied and greater expenditure being made on matters that are not of immediate concern to most people living in London.
On the problem of transport, I have considerable criticism of what has happened during the past few years. It is worth remembering that in 1968 the Labour Government forced on a reluctant Greater London Council the responsibility for transport policy in London. The Greater London Council did not want it, nor did it seek it. Since then London has been badly served in the management of transport, regardless of who has been in control at county hall. It has not been a successful experiment. The events of the past few months should encourage the House, and my right hon. Friend the Secretary of State for Transport in particular, to consider

seriously what should now be done to restore to London, as the nation's capital, a proper and coherent transport policy.
Regardless of who is in control, the Greater London Council is neither competent nor capable of giving London the transport policy that it requires. London's transport system has to cope not only with the residents of London, but with several million visitors from home and overseas during the course of a year. It has to cope with commuters who travel daily into central London from the counties. It is wrong that the ratepayers of London should be called upon to shoulder the substantive part of the subsidy burden to hold down London's fares.
For those reasons, and others, it is high time that the Government had the courage to consider London's problems and transfer the responsibility for overall traffic management to a new authority.
I share the opinion of the chairman of London Transport, Sir Peter Masefield, that we need a new policy-forming transport board that is capable of considering the overall objectives of bus and underground services and of co-operating, through a co-ordinating directorate, with British Rail on rail services. That must make sense.
The subsidy that is being, and will continue to be, paid to London Transport should come from central taxation. The proposal that fares should be subsidised on the basis of £1 for every £1 generated in income has a great deal to commend it. That is the way that we should be going. Out of the chaos of the past few months, brought about by ill-considered policies, we may achieve a more viable and sensible transport arrangement that will benefit London and the people of the country as a whole.
I hope that my hon. and learned Friend the Under-Secretary of State will seriously consider the proposals that have been made by the chairman of London Transport, by hon. Members who represent London constituencies, and by many others. We cannot ignore the fact that the GLC, as one of London's 33 local authorities, is incompetent to handle this issue. We must transfer the responsibility to a body that is capable of dealing with it on a professional and sensible management basis.

Mr. Michael Neubert: I am grateful for the chance to speak at this late hour. I apologise to hon. Members because, although I heard the opening speeches, I was absent for two or three hours in the middle of the debate when I was attending to other parliamentary duties. Some of my arguments might already have been expressed. I hope I shall be forgiven for that.
Insult has been added to injury by the grossly misleading advertising campaign launched by county hall at ratepayers' expense. I should have liked to subject the advertisement to close scrutiny but I have little time to do that. The Advertising Standards Authority has a slogan:
Is it legal, decent, honest and truthful?
The advertisement that has appeared in national and local papers recently may be legal and decent, but it falls far short of being honest and truthful. I shall draw the advertisement to the ASA' s attention in the hope that something positive can be done about it. Nobody likes the wool to be pulled over their eyes. It is a double insult if it is pulled over one's eyes at one's own expense. Ratepayers are being misled with their own money.
The first slogan in the advertisement is "Keep Fares Fair". "Fares" were never "fair". I shall give four quick


illustrations. First, 22 per cent. of passengers who benefited came from outside London and did not contribute through their rates to the subsidies that the GLC provided. Some of my colleagues outside London are receiving the cut-out coupons. That is rich. People who have moved outside London to enjoy cheap housing and lower rates expect people who live in London to subsidise their free travel when they come to London to work or play.
Secondly, the scheme is unfair because, by historical accident, parts of London do not have an underground railway system. It is manifestly unfair that people who pay rates as high as anybody else cannot benefit to the same extent as others who live in London.

Mr. Albert Booth: Does the hon. Gentleman recall what was said from his Front Bench today? We were told that London receives a bigger subsidy from the taxpayer than any other place in the country. Does that not mean that people outside are subsidising Londoners?

Mr. Neubert: It is unfair of the right hon. Gentleman to intervene in my speech and expect me to develop an issue that I did not intend to discuss. Perhaps I can take some of the time of his hon. Friend the Member for Westhoughton (Mr. Stott). It is a question of balance between what is contributed by the taxpayer and what is contributed by the ratepayer. I am talking about inequity for the London ratepayer. I do not have time to elaborate.
The system was unfair because old-age pensioners in London who already enjoyed the free fares concession had to pay a supplementary rate, for no advantage, if they owned their home. On the other side of the coin, workers on London Transport who enjoyed free travel as a perk of their employment, received an extra £50 to compensate for that perk not being as valuable as it was before the low fares were introduced. I have given examples of unfairness and it is misleading to claim that they are anything else.
To say that the 100 per cent. increases are the responsibility of Westminster—another claim in the advertisement—is also grossly misleading. All that the Law Lords did was to interpret the law. The law was made by Parliament. The GLC acted unlawfully. It is responsible for the fares being doubled on 21 March. Fares were reduced by 32 per cent. to 68 per cent. To put the fares back to what they were before 4 October would require raising them by 50 per cent., not 100 per cent. That they are to be raised by 100 per cent. and not 50 per cent. is the direct responsibility of Ken Livingstone and his merry men at county hall who created the chaos in a few short months.
The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) must agree with me because he told us how much more expenditure the GLC has embarked upon as a result of its new policy. He cannot believe that the 100 per cent. increases are due solely to Westminster. They are due in part to the fact the GLC has chosen to spend more money on London Transport.

Mr. Dobson: Will the hon. Gentleman give way?

Mr. Neubert: I am sorry, but I cannot give way again. The suggestion that the subsidy from 21 March will be only 12 per cent. must be misleading if it is compared with the subsidy of 46 per cent. claimed during the "Fares Fair" policy. I have it on the authority of the chairman of

London Transport that if the subsidy under the "Fares Fair" policy was 46 per cent., from 21 March it will be 23 per cent. and not 12 per cent. The hon. Member for Aberdeen, North (Mr. Hughes) said that he was comparing like with like, but he manifestly was not doing so. I hope that he will acknowledge that he must be wrong.
The subsidy before 4 October was 24 per cent. of operating costs. Under the "Fares Fair" policy it was increased to 46 per cent. of operating costs. The subsidy is now to come down to 23 per cent. of operating costs. Therefore, it is grossly misleading to say that the subsidy will be as little as 12 per cent.
The advertising campaign is an attempt to send up so much dust that the trail becomes obscured. The trail leads back to Mr. Ken Livingstone and to the ill-advised adminstration at county hall. I hope that Londoners will not be deceived by this advertising campaign into thinking otherwise.

Mr. Roger Stott: The debate has demonstrated, if proof were needed, the wide differences of opinion that exist between the Government and the Opposition regarding the fundamental approach to operating and funding an integrated transport system. During today's debate, and during the debate on 18 December initiated by the hon. Member for Romford (Mr. Neubert), Conservative Members indulged in wild and extravagant language. That language has been used to describe what has happened in London during the past few months. Conservative Members have singularly failed to lift their heads above their ideological prejudices. Therefore, I wish to reinforce what has been said by some of my hon. Friends who have taken part in the debate, many of whom represent a fairly large proportion of London's population.
What saddens me most of all is that it appears to be only in the United Kingdom that a capital's transport policy is treated as a political football. Instead, we should adopt sound transport planning policies, as happens in almost every European capital.
Looking at London in purely transport terms, it is clear that the operating costs of London Transport have been increasing and demand has been declining for a long time before the Labour Party took over responsibility at county hall, and well before the GLC had responsibility for transport services in London in January 1970. The same pattern has emerged in London as has emerged in the rest of the United Kingdom. Fares increases have had a serious effect on the use of our public transport system.
Rail fares were 69 per cent. higher and bus fares 39 per cent. higher in real terms in July 1981 than they were in January 1970. Tube services were fairly constant between 1970 and 1980, but bus services fell by 13 per cent.
Let me translate those figures into tube and bus journeys. Between 1970 and 1980, tube journeys declined by 16 per cent. and bus journeys by 21 per cent. Therefore, what has been happening in the nation's capital is a mirror image of what has taken place in the rest of the United Kingdom. In other words, spiralling increases in fares equal reductions in services, equal fewer passengers, equal more congestion, equal more cars in our towns and cities. Clearly, a policy decision was required to reverse that trend, to maximise the use of public transport, to make it


attractive for people to use and, most important, to protect the environment of London against the excessive use of the private car.
I would have thought that trying to achieve a sensible transport policy was in everyone's interest. As a consequence, the London Labour Party, after thorough discussion with its members and much publicity about what it was doing—some doubts have been cast on that decision, but I reinforce what was said by my hon. Friend the Member for Edmonton (Mr. Graham) and others—incorporated that policy in its election manifesto. There was a commitment to provide the nation's capital with a transport system that was comparable with the systems in other capital cities in Europe and elsewhere.
After the Labour Party's victory in the GLC elections last May, London Transport fares were reduced on average by 32 per cent., with a new, simplified zonal system introduced for buses throughout London and for tubes in the central area. London Transport was authorised to increase service levels more closely to match schedules and to maximise the use of staff and vehicles where available.
To help buses get through London's traffic, GLC approval was given for work to start on 31 new bus priority schemes, including bus lanes, right turn exemptions and bus priority streets. The GLC expanded London Transport's capital programme in its July 1981 transport policy and programme statements and has not diverted capital expenditure to fares reductions. The lower fare policy has not resulted in a significant additional expenditure on staff or buses.

Mr. Eggar: rose—

Mr. Stott: I gave up some of my time so that some of the hon. Gentleman's hon. Friends could participate in the debate. I now wish to make my own contribution, if the hon. Gentleman will allow me.
Bus passenger mileage has risen as a consequence of this experiment by at least 12 per cent., and there has been an increase of at least 7 per cent. in tube journeys. Preliminary results of an in-depth survey of London residents show that 18 per cent. now travel more frequently by bus and 11 per cent. by tube. Around 40 per cent. of that new travel relates to work trips, and 60 per cent. of the additional travel is attributable to fare reductions.
The lowering and associated simplification of fares has increased not only demand but the occupancy rate for buses and tubes. In his brilliant speech, my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson), who has momentarily left the Chamber, demonstrated with much more clarity than I could the increases that have taken place.
As a consequence, it is obvious to those who wish to look at this policy dispassionately, that the aims and intentions of the GLC, and the Labour Party which now controls the GLC, were beginning to come to fruition.
Clearly, any transportation system that is geared to meet the needs of the community must be paid for in some way or other. The GLC sought to use the powers that were granted to it under the Transport (London) Act 1969. To listen to Conservative Members, with their wild and extravagant language, one would have thought that the

GLC and London Transport were embarking on something wholly unjustifiable. In the words of the Secretary of State,
to promote inefficiency in the form of overmanning and unnecessary services under a policy that is manifestly unfair to ratepayers."—[Official Report, 18 December 1981; Vol.15, c. 556.]
Comments such as those are ill-informed, incorrect and fatuous. Does the Secretary of State not recognise that every other capital city in the advanced world subsidises its transport system far more than we do. [Hon. Members: "Untrue."]
Conservative Members have, throughout the debate, sought to disagree with that assumption. I have some figures, but I will not weary the House by reading them out. Some of my hon. Friends have demonstrated to the House the extent of the subsidy paid in every major capital city in Europe and in the United States.
Take as an example the fare box ratio. A good authority such as South Yorkshire will have 35 per cent. of the cost of operating and running its service related to the fare box ratio. In London it is 75 per cent., in Berlin 39 per cent., New York 28 per cent., Milan 29 per cent., Brussels 30 per cent. and so on. If the Secretary of State and the Under-Secretary wish to challenge those figures then the source is a public authority source conference paper, published in 1981 by the officers of the London Transport Executive.
Here, in the capital city of the United Kingdom, one of the most prestigious cities of the world, 75 per cent. of the cost of running London Transport, prior to the "Fares Fair" policy, came from revenue. In other words public support, either by rate or by central Government grant, was the lowest in Europe.
I came across a rather interesting document the other day entitled "The Burning Question for Europe". It says:
Britain lags far behind her Community partners in appreciating the quality of public transport. Indeed, `quality' is hardly a word that we generally associate with public transport. Yet a fundamental change of attitudes could lead to a major saving in energy usage. It is false economy to skimp on public transport—this is one area where subsidised public investment can and does pay off. It can halt the trend towards selfish use of private cars which waste oil, whereas public transport—or `mass transit' in contemporary terms—is an… efficient user of coal or nuclear generated electricity… Options to improve public transport include:—price incentives to get people back into the buses (the South Yorkshire experiment in the United Kingdom has proven notable). Encouragement of cycle-ways … restrictions on urban parking.
[HON. MEMBERS: "What is the source?"] Indeed, what is the source? I shall now reveal it. This document was not written by some wild Marxist. It was not even written by a tired moderate like myself. It was written by two Conservative European Members of Parliament. It is available at a modest cost from the Conservative Party Central Office from which I obtained it. Perhaps Conservative Members should take more notice of their colleagues who speak in the European Parliament.
My hon. Friend the Member for Newham, South (Mr. Spearing) tried in his speech to correct some of the grossly inaccurate statements that were made about the cost of the "Fares Fair" system. It is clear that the Conservative Administration left a deficit of £48.2 million, which in itself would have required a rate precept of 2.5p in the pound. The fare reductions, together with service improvements, would have cost over £70 million, which was a rate precept of 3.6p in the pound. However, the largest contributory element to the supplementary rates that were levied was the Government's insistence on


clawing back £111 million from Greater London. Without the penalties of the Secretary of State's clawback, the cost of operating a sensible transport policy would have been fairly reasonable. My hon. Friend the Member for Holborn and St. Pancras, South has already outlined the cost. When one compares that cost—I make no apology for doing so—with the subsidy in other European capitals, London, even under "Fares Fair", is contributing only 46 per cent. of the total. That is still a long way behind every other capital city in Europe.
Everyone in the Labour Party fully supports the GLC's "Fares Fair" policy. Unfortunately, as we are all painfully aware, their Lordships' judgment in December means that the GLC can no longer carry out its electoral pledges and the power that everyone believed that the GLC had under the Transport (London) Act 1969 is non-existent. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) spent most of his speech talking about that matter.
It is clear that no one—not even the Secretary of State for Transport, or any Conservative Member—suggested that the GLC was acting illegally until Bromley took it to court. They may not have liked it, but no one suggested that the GLC was acting illegally. For my sins, I have reread the debate in the House of Commons in 1968 about the 1969 Act. It is clear from the contributions that were made by hon. Gentlemen and Ladies who now form the present Administration that they too believed that the powers existed. Perhaps I may quote from the wind-up speech by the hon. Gentleman who then represented Tavistock. He is now the right hon. Member for Henley (Mr. Heseltine) and is the Secretary of State for the Environment. He said:
There is now presented to the Greater London Council one of the most fabulous opportunities which could be conceived. For the first time, the councillors of London are elected to represent a generation who will probably replan, rebuild and recreate the environment of the society within which they themselves will live. No generation in history has ever had such an opportunity. In the context of the enormous sums of money involved, the £860 million to be spent on road works alone by 1983, and so on, one realises how magnificent is the opportunity presented to those responsible in the Greater London Council."—[Official Report, 17 December 1968, Vol. 775, c. 1295.]
I cannot follow that and I make no attempt to do so.
We are all painfully aware of the Law Lords judgment on London Transport and on the GLC. It places a fiduciary duty upon the GLC. The judgment also places on the GLC a commitment to abide by business principles. As a consequence of carrying out the instructions implicitly within the Law Lords' judgment—as a consequence of that and nothing else, which should be made absolutely clear—there will be an immediate doubling of fares.
I do not want to bore the House with great figures, as my hon. Friend the Member for Newham, South did this afternoon—[Interruption]. In that case, I will take a little more licence and continue to do the same.
My hon. Friend referred to buses. I shall refer to tubes. At the moment the fare from Finchley Central to Westminster is 70p. It will be doubled to £1.40. The hon. Member for Ealing, North (Mr. Greenway) has Hanger Lane station in his constituency. I use it occasionally. At the moment, it costs 50p to travel from here to Hanger Lane. The fare will be doubled to £1. Therefore, the hon. Member's constituents in Ealing will have to pay an additional £5 per week on a 40-hour week to make that tube journey. The rate precept on the hon. Gentleman's

constituents was nothing like the amount of money that they will have to pay as a consequence of the Law Lords' decision. There is no doubt about that.

Mr. Greenway: Is it not a simple Matter of mathematics? How were the books balanced?

Mr. Stott: Again, I put to the hon. Gentleman the proposition that, if his constituents are travelling between Hanger Lane and Westminster, their present fare of 50p will be doubled to £1. If they travel five days a week, as a consequence of the Law Lords' decision they will have to pay an extra £5 per week. If the GLC had been allowed to continue the "Fares Fair" policy the rate precept on those same constituents would have been far less per week than £5.
Let us be clear that the consequences of that decision will also be closures of uneconomic tube stations and the withdrawal of bus services. Transport workers will be made redundant and there will be more congestion on London's roads.
On 18 December, and subsequently, the Secretary of State for Transport made certain comments that, on reflection, he may regret. I draw his attention to The Standard of Monday 22 February. On the front page of the paper an official of London Transport says:
because of the Law Lords' decision we have got to make economies. We are cutting down on overtime and rest day working. This does mean some journeys will take longer.
Unfortunately between now and July when we will have imposed a 10 per cent. cut, journeys will become more irregular, gaps in services wider, and passengers even more seriously inconvenienced.
The chairman of the GLC transport committee, Mr. Dave Wetzel, said that the cutbacks were
the first of a whole series of drastic long-term reductions in the capital's bus and Tube services, being forced on LT by the Law Lords' judgment. It will eventually mean taking 1,000 buses off the road, the loss of 1,000,000 passengers a day and sheer misery and discomfort for the travelling public.
That is the scenario that Londoners and London will be faced with as a consequence of that decision unless the Government introduce legislation to allow the GLC to carry on the policy that it thought that it was legally entitled to carry on. If the Secretary of State and the Under-Secretary of State wish to save some time, I can commend the Bill of my right hon. Friend the Member for Battersea, North (Mr. Jay) which is already drafted and has the approval of the House.
The Opposition will not oppose the Bill tonight, because we agree with its aims. However, I give the Secretary of State notice that we shall seek to amend the Bill in Committee to restore power to the GLC to pursue a sensible and realistic transport policy. If we fail in our attempts to do that, the ensuing chaos will be laid firmly and correctly at the door of the Secretary of State for Transport and this miserable Government.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke): The hon. Member foe Westhoughton (Mr. Stott) said that he was giving a dispassionate description of London Transport's problems. His speech seemed to me very impassioned and partisan. On a slightly less passionate note, he emphasised that there were wide differences between us. However, on the narrow subject matter of the debate, we are absolutely agreed. Every hon. Member who has spoken has welcomed the Bill and intimated that there is no intention to vote against it.
The first popular and necessary purpose of the Bill is to make it clear to people above retirement age and the disabled in London that the GLC will have exactly the same power as every other local authority to have its own concessionary fares scheme.
It might come as a surprise to some hon. Members that the problem of concessionary fares does not arise from the Law Lords judgment. Concessionary fares were not mentioned in the Law Lords judgment. Doubts about concessionary fares were raised by the GLC as one of the first stages in its campaign since then claiming that all its legal powers are in doubt and that there is a risk to the London Transport system. It has tried to raise quite unnecessary fears among the travelling public. My hon. Friends the Members for Ilford, South (Mr. Thorne), Ealing, North (Mr. Greenway) and Paddington (Mr. Wheeler) pointed that out.
An ingenious point has been found, as the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) mentioned. It was first canvassed in the House when we talked about the Law Lords judgment. I mistakenly said that the GLC was paying for the concessions under the powers in section 138 of the 1968 Act that most other authorities used. The position is that they were paying for concessionary fares out of the general powers of all local authorities to apply the product of a 2p rate. The hon. Member for Hackney, South and Shoreditch (Mr. Brown) said—I see that he is agreeing with me—that the GLC could have continued to pay the concessionary fares out of the 2p rate, but it decided that it would not do so. It decided that the 2p rate was needed for other more important things. There is no limit, as I shall show, to the things that the Labour Party in London will spend money on given half the opportunity.
The GLC has raised a quite unnecessary fear and doubt. The Bill's purpose is to kill that canard and make it quite clear to the pensioners and disabled in London that the GLC will have the same power as any other authority. That cannot be opposed.
Needless to say, the debate has gone on to wider issues because we have discussed the expensive and extensive campaign by the GLC and London Labour Party to try to raise fresh fears among the travelling public. It seeks to persuade everyone that the Law Lords judgment has created doubt and confusion and robs London Transport and Londoners of the degree of subsidy that everyone agrees that a public transport system in a major city requires.
I shall try to demonstrate that most of the arguments about subsidy that are being raised by such campaigners are inaccurate or sheer mythology. That applies to their arguments about the subsidy that London receives and the amount that they believe is paid abroad. The Government believe that London Transport requires a reasonable level of subsidy. Indeed, we maintain a reasonable level of subsidy. Our policy is broadly in line with that followed by all other Western European countries, that followed by the Labour Government and the Labour Party's policy before the London Labour Party followed the lead given by the South Yorkshire Labour Party and in a sudden aberration imagined that subsidy could be paid both indiscriminately and without limit.
I shall give some facts to justify my assertions and to show that the division is quite artificial. Not only Ken

Livingstone, but the London Labour Party, has led the Parliamentary Labour Party and, as far as I know, the Liberal and Social Democratic Parties into saying that the subsidy must enter a new dimension. International comparisons are difficult to make. Before I launch into my comparisons, I should point out that there are grave doubts about all such comparisons. I do not know of any academic research that would allow one to say—as certainly as the hon. Member for Aberdeen, North (Mr. Hughes) might—that like is being compared with like. However, one must do one's best. The hon. Member for Westhoughton was wrong when he said that every major city was subsidised even more heavily than London. On the hon. Gentleman's basis, the figure for Tokyo is 5 per cent. which is far below the London level.
Figures for the late 1970s, show that the United Kingdom"s operating subsidy per head was roughly equivalent to that in most other European countries. In US dollars, the United Kingdom was paying $10 per head by way of operating subsidy to public transport services compared with $13 in France, $20 in Belgium, $20 in the Netherlands, and $11 in Switzerland. I cannot find the figure for Germany, but the figure for the United States of America was $9, and below that for the United Kingdom.
However, some of those countries are wealthier than Britain. Not surprisingly, they can afford to spend more than us on their public transport subsidies. I commend the table, because it reveals that our operating subsidy to public transport is higher, when expressed as a percentage of our gross domestic product, than most countries in Western Europe and any white English-speaking country. The main exception is Sweden. The figure for Britain is 0·22 per cent. of our gross domestic product. The figure for France is 0·20 per cent., for the United States of America 0·11 per cent., and for Australia 0·13 per cent. The other figures can be found in the document. One or two of my colleagues in the European Parliament are great enthusiasts for public transport, but it is the work of campaigners and mythology to tell hon. Members that Britain does not subsidise as much as other countries.
I have stressed that the Government's policy is to provide a reasonable subsidy, and London gets that. Unfortunately, hon. Members on both sides of the House are receiving communications from people in London who seem to believe the wholly misleading and inaccurate advertisements that appeared in the newspapers about the subsidy that London receives. The totally false figure of 12 per cent. is used to describe the subsidy that London receives. If one includes items which clearly must be included, such as depreciation and renewal and capital grants, the figure is about 30 per cent.
I shall give the House the exact basis on which we arrived at the subsidy for 1982. In 1982, from public funds, London Transport will get revenue support of £63 million. Depreciation and renewal will be £89 million, capital grants £34 million, concessionary fares £50 million, new bus grants about £9 million, making a total of £240 million. It expects to get £490 million from fares. So grants from all sources will amount to about 30 per cent. of London Transport's income. I have left out £125 million, which the GLC has chosen to pay next year all in one go, to cover the losses of eight months of its cheap fares policy, although that is another great contribution from public funds to London Transport's finances. Thus, the advertisement is totally inaccurate.

Mr. Jay: rose—

Mr. Clarke: I must get on, but I shall try to give way later.
Another complete inaccuracy was introduced—that somehow, until the London Labour Party changed its policy, the subsidy was different from that enjoyed by people who lived in places such as Bromley, because people there largely used British Rail services. False comparisons were made with British Rail, because those people campaigning for the GLC tended to make comparisons with the rail network as a whole, some of which is commercial, and not to concentrate on the subsidy given to the commuter services in London and the South-East. The percentage of expenditure covered by revenue for 1980—the last pre-Livingstone year—was 71 per cent. for London Transport and 70 per cent. for British Rail. So, under this Government, the previous Government, and the pre-Livingstone Labour Party, the level of subsidy was roughly in balance, and became imbalanced as a result of the sudden changes in policy by the Labour Party.
I come now to central Government's contribution. It is popular among London Members on both sides to say that the national taxpayer should come to the rescue by making greater Government contributions. We accept that the Government owe a duty to the country's capital, and that there should be a taxpayer's contribution, as there is, to a much lesser extent, to passenger transport in other cities. However, we give a substantial contribution, far more than constituents in my constituency of Rushcliffe or in most constituencies in the North of England realise, to subsidise London's transport through the transport supplementary grant arrangements. We have put it up. Following the change in the GLC which took place in May, because of the problems of the recession, we gave slightly more grant to Ken Livingstone's GLC than we gave to Sir Horace Cutler's GLC. Let me give the figures for the transport supplementary grant settlement. We accepted the revenue support for 1982–83 of a little over £89 million, which is nearly 5 per cent. more in real terms than we gave for 1981–82. We also accepted grant for £196 million worth of capital schemes, over half of it for London Transport schemes, and we also increased its grant for road maintenance to £111 million, which was also 8 per cent. up in real terms on 1981–82.
As my right hon. Friend said, London already gets more than its fair share, in the opinion of provincials like myself and our constituents, who in many cases do not have the transport services that are enjoyed in London. It gets far more than its share of taxpayers' money in grant. Because of the difficulties in London under successive administrations, the Conservative Government have slightly increased London's share of the total taxpayers' grant for transport. Under the Labour Government's transport supplementary grant settlement in 1979–80, London received 35.9 per cent. of the total grant distributed. In the three years of this Government, the figures have been 37.7 per cent., 41-5 per cent., and 39.6 per cent. About 40 per cent. of taxpayers' money for transport grants goes to London, which has only 15 per cent. of the population.
Therefore, London already receives a large contribution from national taxpayers. Hon. Members have suggested new and ingenious ways of getting the national taxpayer to contribute more. Taxpayers in

Nottinghamshire, and I suspect Scotland, Lancashire and everywhere else, will probably say "Enough is enough". They do not have the same pensioners' concessionary arrangements, streets full of half-empty buses and the other facilities which are readily provided in London.
The Government's position before May 1981 was consistent with the Opposition's policy, consistent with the Labour Government's policy and is broadly consistent with the policy of every advanced country. That was the position until Ken Livingstone changed the other three parties' minds. It is now suggested that we should move to a system of a much higher subsidy. My hon. Friends made the point concerning costs, and I shall deal with that shortly.
I remind hon. Members about my remarks on the Labour Government's policy. As the right hon. Member for Battersea, North (Mr. Jay) said, this is not just a party point, although such points have been made throughout the debate. I remind right hon. and hon. Members of their positions until Livingstone, Wetzel and Miss Wise changed everything and moved them to, I will not say a Marxist, but a rather eccentric and oddball position. The 1976 public expenditure White Paper was prepared by the right hon. Member for Stepney and Poplar (Mr. Shore), who is now the Labour Shadow Chancellor. On transport subsidies, it said:
the Government's policy is progressively to reduce the level of such subsidies… In allocating the subsidy between authorities … the Government have made a substantial shift away from holding down fares in the major conurbations…It intends to continue this shift of support in future years".
The right hon. Gentleman was then moving away from support subsidy for fares in major conurbations. The now Social Democrat but then Secretary of State for Transport, the right hon. Member for Stockton (Mr. Rodgers), in the transport policy document of 1977, got down to the real problem of indiscriminate subsidies. He said:
subsidies transfer the cost of a service from the traveller to the taxpayer or the ratepayer and the traveller is often a taxpayer or ratepayer himself. To use subsidies to disguise from people the cost of the services they are paying for is pointless.
That was the position of Labour's then Secretary of State for Transport, now one of the gang of four in the Social Democratic Party.
Tony Crosland, an architect of the vision for a Socialist society, debunked the whole mythical theory that cheap fares will clear car passengers and traffic congestion off the roads. They have plainly not done that in London in the past few months, and all academic research shows that they have not done it in South Yorkshire. All the advocates of this policy say that that 'will happen if only we continue with it, regardless of the cost.
What Tony Crosland said in the "Orange Paper" about bus fares and car usage has been quoted. He also said:
Increases in bus fares do affect the number of passengers carried by bus, but available evidence suggests that most of the loss of ridership comes from journeys forgone rather than from switches from bus to car. Nor are generalised subsidies, unlike concessionary fares, a good way of securing welfare objectives since they help the rich and poor alike.
I might add that they help overseas tourists and everybody else using the London underground. However, the principles applied by Tony Crosland, and his theories that we hear now, remain the same. There is no factual support for what is obviously a sincerely held belief by many on the GLC and on the Opposition Benches that they will solve London traffic problems if they can only get the fares down by 25 per cent. and keep them there.
However, a rather eccentric and, what is more disastrous for London, totally incompetent collection of people in county hall will have moved the entire Centre and the Left of the political spectrum, if we are not careful, into pursuing mythological transport policies which do not tackle the problem of cost.
When talking about giving subsidies to transport, in addition to arguing and debating, as we all do, whether the money is to come from subsidy, one should also consider, in a well-run system, what the money is spent on. One way of achieving the cheap fares we all want is to try to maintain the efficiency and keep down the cost of the operation. The hon. Member for Tooting (Mr. Cox) urged that. But what he suggested in principle was not followed by what he recommended in practice. However, one thing that the GLC could do if it was up to it would be to consider the operating efficiency of London Transport and to see how it could get the costs down.
It is interesting to note that subsidies have been needed in London to an ever-growing extent only in the past decade. The system broke even in 1969. Since that time, there has been a large loss of patronage, which means that fewer people want to use the buses and the tube, and also a dramatic increase in real costs. The staffing numbers remain exactly the same although the patronage and the service have dropped. The real costs went up, largely on staff. Among the principal beneficiaries of subsidy have been busmen's wages and the general operating inefficiencies of the system.
I should like to give some comparisons of cost. I shall not give comparisons with private sector operators. On that basis, London comes out terribly. I shall be fair and make comparisons with nationalised and public transport operators. If one looks at the changes that have taken place in real costs, allowing for inflation in London since 1970, the costs of the National Bus Company are one and a quarter times what they were in 1970. The costs of the municipal bus companies are one and a third times what they were in 1970. The costs of London Transport are one and a half times what they were in 1970. The previous Conservative Administration in county hall appointed Sir Peter Masefield largely to try to get down to this almost insoluble problem in London Transport of stopping real costs going up inexorably and taking up the subsidy given by taxpayers and ratepayers.
It is not the case that since then the Labour Administration has tackled the problem. It increased busmen's wages from 8 to 11 per cent. and reopened the settlement. As my right hon. Friend the Member for Worthing (Mr. Higgins) has remarked, it gave £50 to the busmen for the alleged loss of value of their concessionary fares. That will not be taken back. It has gone. It also recruited many staff who may have been allegedly holding jobs on the buses but who were not needed to run the system. The hon. Member for Holborn and St. Pancras, South tried to confuse the issue by saying that some were extra police and that to criticise staff increases was to put people at risk on the tube.

Mr. Bidwell: rose—

Mr. Clarke: The increase in police employment, the only part of the increase that has been agreed with anyone else, was done as a result of an agreement with the Government, my right hon. Friend the then Secretary of

State and my right hon. Friend the Home Secretary and was covered by the transport supplementary grant settlement to London. That paid for the recruitment of extra police. The other people, bus staff and so on, were not part of that agreement.

Mr. Dobson: rose—

Mr. Clarke: I would give way if I had time. I have left myself with four minutes in which to deal with an issue that should have dominated six hours of debate. I refer to the cost and the role of the Law Lords. The Law Lords have actually restrained the GLC's expenditure in the area of transport. No one seems capable of restraining the Greater London Council's ability to spend money on any other subject. The rate precept is still going up by 90 per cent. Londoners will have high fares and high rates. If it had not been for the Law Lords and if transport had been allowed to go to the level that would otherwise have occurred, the rate precept would have been even higher.
The rate precept would have almost trebled if the cheap fares policy had been continued. The present doubling of fares to cover losses and the paying of £125 million now and next year is simply the cost of adding on the losses made in the first eight months before the policy was stopped. The rates would have gone through the roof. What is happening now is that the GLC is raising rates and getting involved in grant penalties. It tried to fudge the figures by attributing all the grant penalties to transport. The grant penalties are not solely attributable to transport. The reason why the GLC finds itself with grant penalties is that all of its expenditure is going up and so attracting grant penalties. The council fudges the figures by pretending that my right hon. Friend the Secretary of State for the Environment is penalising it on transport with block grant deductions. That is absolute nonsense.
One should examine all the new items that have come into this year's GLC budget. The debt charges show some interesting new developments. An item described simply as "development" is put at £13 million. No one outside the GLC or, indeed, within central Government is altogether sure of the purposes for which some of these sums are earmarked. The GLC is an autonomous local authority. The budget for industry and employment is £24.5 million and for loans to industry £10 million. About £40 million is to be used within a new enterprise board to generate, according to the GLC, new employment. That is a cruel deception. The idea that employment is generated by spending ever-increasing amounts of ratepayers' money is absolute fiction. As my hon. Friend the Member for Romford (Mr. Neubert) has remarked, it drives employers out of business and costs jobs. There is no way in which that assertion can be waved aside. The hon. Member for Holborn and St. Pancras, South sounded almost as if he believed that costs had no effect on employers' ability to remain viable or on jobs.
The rest of the cost will be revealed as long as the Labour Party remains in control of the GLC. On transport, the Law Lords checked it, and the Government will check it. If only the Labour Party, the Liberal Party and the Social Democrats will go back to where they were before Ken Livingstone came along, we can all check it. London can then return to the real task of achieving a sensible transport system.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Goodlad.]

Committee tomorrow.

Orders of the Day — TRAVEL CONCESSIONS (LONDON) [MONEY]

Queen's Recommendation having been signified—Resolved
That, for the purposes of any Act of the present Session to confer on the Greater London Council the same powers in res2ect of travel concessions as those exercisable by the councils of London boroughs and the Common Council of the City of London, it is expedient to authorise any increase attributable to that Act in the sums payable out of money provided by Parliament by way of rate support grants.—[Mr. Goodlad.]

Orders of the Day — Northern Ireland (Departments)

10 pm

The Under-Secretary of State for Northern Ireland (Mr. John Patten): I beg to move,
That the draft Departments (Northern Ireland) Order 1982, which was laid before this House on 9 February, be approved.
Since taking office, while we have no wish to see direct rule continue indefinitely, the Government have been determined to ensure that the administration of direct rule is fair and impartial. I hope that that is also the wish of the Opposition.
Furthermore, the Government are absolutely deter-mined to ensure that the implementation of policies and the running of government in the Province is as efficient and as effective as possible under direct rule. To improve efficiency and to make the machinery of government in the Province more accountable to ministerial direction and control while direct rule continues, my right hon. Friend who is now the Lord Privy Seal but was then the Secretary of State announced in March 1981, in reply to a parliamentary question tabled by my hon. Friend the Member for Skipton (Mr. Watson), that he proposed to merge the control functions of the Northern Ireland Departments of Finance and of the Civil Service. On 30 July 1981, again in answer to a parliamentary question by my hon. Friend the Member for Skipton, my right hon. Friend said that he had decided to set up a consolidated Department of Finance and Personnel in the Province.
In pursuit of the Government's objective of achieving more effective use and control of public sector financial and manpower resources—I hope that all hon. Members will regard that as a laudable aim—the Department will be responsible for resource planning across the whole range of functions exercised by all Northern Ireland Departments. If the order is approved, the new Department will also be responsible for personnel matters in exactly the same way as the Department of the Civil Service which will cease to exist. At the same time, most of the wide range of miscellaneous functions which the Department of Finance has collected over the years will be transferred to other Departments. I shall return to that in a moment.
My right hon. Friend the Secretary of State has made it absolutely clear that discussions are taking place on ways in which it might be possible to transfer to the people of the Province a greater degree of responsibility for their own affairs and a greater degree of power over their own affairs. While the discussions are going on, we must at the same time ensure that the pre-existent mechanisms for government in the Province are as efficient as possible.

Mr. J. Enoch Powell: So you must.

Mr. Patten: I am glad to have the support of the right hon. Member for Down, South (Mr. Powell). During the period in which direct rule continues, which we all recognise as second best, we must ensure that an essentially temporary form of government which no one would have wished to see is made to work as well as possible and to make the best possible use not only of financial resources but of the human resources of the excellent Northern Ireland Civil Service with its proved traditions.
It is therefore important that Northern Ireland should benefit and be seen to benefit from any administrative

changes which can make for a more cohesive system of management within central government. Therefore, the Secretary of State has decided that it is right to proceed now with the reorganisations provided for within the order. The order gives effect to that decision.
Perhaps I may pick out some significant points of detail in the order which will be of interest to Northern Ireland Members. Article 3 re-names the Department of Finance as the Department of Finance and Personnel, while Article 4 dissolves the Department of the Civil Service and transfers its functions to the new Department of Finance and Personnel.
Article 5 transfers miscellaneous functions of the Department of Finance to other Departments. These are functions which, in the Government's view, are not appropriate to continue to be exercised by a Department which is concerned with the central control of resources and manpower within the Province. They include responsibility for matters such as the Ordnance Survey of Northern Ireland and the Public Record Office, which are to be transferred to the Department of the Environment, together with responsibility for the collection of rates and the registration of titles and deeds. Responsibility for the General Register of Northern Ireland and certain licensing functions are to be transferred to the Department of Health and Social Services. Responsibility for the collection of tithe rent charges—I must admit that I found it curious that such charges still exist in that form in Northern Ireland—and land purchase annuities will be transferred to the Department of Agriculture.
I have given a brief resumé of the effects of the order and I commend it to the House—

Mr. James Kilfedder: Will the hon. Gentleman give way?

Mr. Patten: The hon. Gentleman has intervened at a rather late stage in my speech. I had begun what passes for my peroration, but I give way to him.

Mr. Kilfedder: What reduction will the order bring in the number of civil servants at Stormont?

Mr. Patten: I am grateful to the hon. Gentleman for asking that question as it allows me to announce what manpower reductions are possible. The sole reduction so far is one post at permanent secretary level. I should also say that this exercise in consolidating the Department of Finance and the Department of the Civil Service was not intended as a manpower reduction exercise. It was intended to enable greater efficiency in planning and disposition of manpower and financial resources in the Province.
In the hope that I have explained the position sufficiently for the hon. Gentleman, I return to my peroration which has only a few words to go. I commend the order to the House as a measure which I believe can only assist in the better government of Northern Ireland.

Mr. Clive Soley: The Opposition, of course, identify themselves with the Minister's aim that the government of Northern Ireland should not only be impartial but should above all be seen to be impartial. However, I do not see what that has to do with the order.
Having heard the Minister, one could form the impression that he was not a member of a Government one


of whose favourite blood sports was civil-servant bashing, which is what much of this matter is about. One does not need to look far into the background to find the Prime Minister and her aide in this respect, Sir Derek Rayner, with their comments on the Civil Service on this side of the water, to see what the Government's attitude is towards civil servants. There is an underlying implication that in some ways the Civil Service is a parasite on the economic body politic. I do not accept that, and I do not think that the Governments of most countries would accept it now. But there is a deep desire in the Conservative Party—the Prime Minister seems to exemplify it more than most—to have a go at civil servants and in some way cut them down to size.
Much of the order is about public expenditure. The Minister has just said that it will not reduce the number of posts. I am not sure whether he means that in the long run it will not reduce the numbers, because there are a number of ways in which one can reduce them. One is by not recruiting when vacancies occur. Did the Minister take that into account when he answered the intervention of the hon. Member for Down, North (Mr. Kilfedder)?
This is a classic case of the Government, both here, and now in Northern Ireland, trying to hit at Civil Service manpower over the long run, and at public expenditure in so doing. That might be logical in the Government's mind, but the curious point is that although they have been very effective in knocking local authority expenditure they have never knocked Government expenditure. Government expenditure rises. It is a classic case of the Government's saying "Don't do as we do; do as we tell you." That is what they say to the local authorities.
One of the reasons why Government expenditure is constantly so difficult for the Government to keep down is increasing unemployment, which is very relevant in the context of Northern Ireland. The Government are not trying to split the personnel functions. Those will be centralised within the Department of Finance and Personnel. I welcome that as an improvement on what has been introduced on this side of the water. It is one of the differences between the Government's policies here and their policy in Northern Ireland. It is a step in the right direction, but is is only a step.
There is a strong case for a separate Department of personnel. In 1968, when the Fulton Committee reported on the Civil Service, it stated:
Personnel management and career planning are inadequate.
If we pursue the policy that the Prime Minister is pursuing here, and the Minister is pursuing in Northern Ireland, we shall return to that problem, which Fulton highlighted in 1968.
Those of us who cast our minds back to the political discussions at about the time of Fulton and to the discussions on the Civil Service will remember that there was much criticism from all parts of the political scene that the Civil Service was not as good as it could be, and that one of the crucial reasons was recruitment, training and career development within it. I see this change as a backward step, and not as a forward step.
Both finance and personnel are important enough to justify separate Departments. The main danger is that progressive personnel policies will be subordinated to financial matters, because the Department's financial push will, for obvious reasons, take priority, and the manpower needs will become secondary. That is what Fulton persuaded us to break away from.
There is another problem. Given the Government's high-handed treatment of the civil servants in recent years—not least their latest outburst about the lower-p; id sections—the Government may well run into difficulties with industrial relations within the Civil Service. If that happens—if there are more strikes, working to rule or whatever as a result of the Government's policies—senior management will be wrapped up in questions of industrial relations and finance may well take second place for that period.
The Minister might also give an assurance when he is winding up about staff transferred from the new Department of Finance and Personnel to other Departments. There is a difficult problem involved—she possibility for promotion for staff transferred from the Department of Finance which has caused anxiety and concern among civil servants in Northern Ireland. Perhaps the Minister could give some indication to the House of how he intends to handle that.
The abolition of the Department of the Civil Service is in conflict with the Fulton recommendations of 1968. What is the reason for changing the system now? the Minister has told us that it is to make the machinery of government more efficient and more accountable to the Secretary of State and that the new Department will concentrate on the management of money and manpower. That makes many assumptions, none of which the Minister dealt with.
It assumes that there is inefficiency now. If that is correct, why did the Minister not tell us what the inefficiencies are? The House has a right to know. Perhaps he could give us the evidence to show what the inefficiencies are.

Mr. John Patten: Does not the hon. Gentleman recognise that one can be reasonably content with the way in which affairs are being conducted but that one might wish to achieve greater efficiency rather than wipe out inefficiencies?

Mr. Soley: I recognise that, but it puts all the more onus on the Minister to tell us what the improvements will be. He has not told us how the order is going to lead to improvement. He has told us what is going to happen; he has told us what we can read for ourselves in the order, but he has not told us how it will improve matters. I hope that the House will keep a close watch on the efficiency of the Civil Service to see whether it improves or whether the constant bashing by the Government does not lead to a more inefficient and sadly demoralised Civil Service. That is one of my primary concerns.
I am concerned about the Government statistical service which, although not directly involved, draws much of its information from some of the groups involved. The Government have declared that 1982 is the year of information technology. What do they do straight away? They banish the information service when they attack the Government statistical service. Will the situation he made worse by the cuts which will be imposed on the collection of important statistics in regard to social and economic factors?
Can the Minister also tell us what the long-term aim is for Ordnance Survey? I hope that the Government are not still thinking of hiving it off to the private sector, with this being the first step by shunting it off to another Department. Perhaps he can assure the House on that.
Overall, I am concerned about the order because it is another exercise by the Government in civil servant bashing. There is no advantage to be had from that for the Government or for the Civil Service, and least of all for the public in Northern Ireland.

Mr. James Kilfedder: The Minister recommended the order to the House because reorganisation will make government more efficient. I am not certain that he has made that case. I echo the words of the hon. Member for Hammersmith, North (Mr. Soley) and question whether the Minister has put before the House anything which ought to lead the House to accept the order.
I asked the hon. Gentleman what reduction there would be in the number of civil servants. His answer was that there would be a reduction of one senior official. I am not convinced that Government expenditure on bureaucracy will be reduced by the order. I think it will lead to an increase in expenditure. I fear that it will lead to inefficiency. There is no talk of the order leading to any savings. The Government should hold the order back. They are committed to the establishment of an elected assembly at Stormont before the end of the year. Surely it makes sense to leave discussion of the reorganisation of Government Departments to that elected body, which will have the onus of devising a system of devolved government in Northern Ireland. I do not know why the Government are rushing the order forward.
I have a suspicion that there may be an ulterior purpose. Unionists are entitled to consider the order against the background of the Anglo-Eire talks. We must analyse carefully what the order is proposing to do. It may not be as simple as the Minister has made it out to be. Article 6 confers on the Civil Service the new rank of undersecretary. It gives to persons holding that rank the power to sign regulations and administrative minutes and to appoint persons to various public bodies such as departmental advisory bodies, bodies which have an executive role and bodies whose functions are investigatory. The Minister may argue that the new name of undersecretary is merely to bring the nomenclature of Northern Ireland civil servants into line with London counterparts. Officials of the rank of senior assistant secretary are to be renamed under-secretaries.

Mr. Patten: Article 6 does not do what the hon. Gentleman is suggesting. It gives the new rank of undersecretary, which was formed by joining together the old ranks of senior assistant secretary and deputy secretary, the right under pre-existent law to seal and sign documents on behalf of their department. That is all that the order does in article 6. It gives that power to the new class of person, the person who will act under a new name.

Mr. Kilfedder: That is what I have just said. A new name has been given to senior assistant secretaries, and that is the title of under-secretary. I suspect that in practice a few Northern Ireland civil servants, newly called undersecretaries, will be attached to the London headquarters of the Northern Ireland office at Great George Street, or to other London-based departments, and that from this new vantage point they will take part in the Anglo-Eire talks. Until now the Government have been able to claim that no

Northern Ireland civil servants have been engaged with English civil servants in the various meetings of officials that have taken place with the Dublin authorities.
I understand that only a change in name will lead from the order. However, the salary of the new grade of Northern Ireland civil servant was increased by £400 a year last year entirely as a consequence of the change of name. I am astonished that a Conservative Government could provide such financial largesse at a time when they are lecturing people in Northern Ireland and elsewhere in the United Kingdom to save money. They are telling people to work harder and to be more productive before they can expect to obtain an increase in their wages. How did it come about that following a change of name £400 was added to a salary of about £20,000 a year? It is remarkable. The people in Northern Ireland are entitled to know how such an increase is justified.
Let us examine another part of the order. Why, after all these years, should the central position of the Department of Finance in relation to the purchase of land and other property under the enactments in Schedule 1, be dispersed among three Departments? I have no wish to go into detail, but some of the changes make me wonder where the dividing lines have been drawn. For instance, why should the Public Works Loans Act go to the Department of Agriculture, while the Public Works (Ireland) Act goes to the Department of the Environment? Why has that division taken place? Is there not sense in the same Department being responsible for overseeing public works and the way in which they are financed?
I am not satisfied that the Government have made out a case for the order. The Government have proved neither that the order will make administration in Northern Ireland more efficient, nor that it will produce any savings in the cost of the bureaucracy. As the Government are committed to establishing an assembly at Stormont by the end of the year, it would be better to leave to the newly elected representatives the task of advising on what is the best system of administration for the Province.

Mr. Wm. Ross: I was pleased to hear the Under-Secretary of State say that the Government wish to make direct rule fair, impartial, effective and more efficient than it has been in the past. I am not so clear about how the order does that. I assume that it arises out of the Rayner scrutiny of the financial administration within Northern Ireland Departments and the Northern Ireland Office. If that is so, in the light of what the hon. Member for Down, North (Mr. Kilfedder) has just said, I direct the Minister's attention to the summary of the Rayner scrutiny which says that Northern Ireland formerly operated
under a 'mini-Whitehall' system of Government, with a local Minister and Ministry of Finance recognisably responsible for central resource (both finance and manpower).
The summary concluded that the present fragmented arrangements operated by disparate departmental organisations prevented the Northern Ireland Office from maximising the administrative advantages which should accrue from the relatively small size of the 23,000 non-industrial staff.
Northern Ireland was efficiently organised and administered under the old Stormont Parliament. One of the principal reasons for that was that the administration was not in this House. It worked well. There were no fancy


schemes and no way-out ideas. It was a simple, straightforward, majority rule system. If the Government intend to put the control of Ulster back into the hands of the people who live there, perhaps the Under-Secretary will take a more careful look at the efficiency of that system—the same system that works so efficiently and well here—and restore that system rather than the system that they are trying to foist upon us.
It is apparent that once local control was removed the whole system went slack and everything started to slide. We are back to trying to make changes and to get the central Treasury Department, with no direct spending functions, to operate in a new economic environment.
I am not sure what the new economic environment is, unless it is that 100,000 people are now unemployed. Leaving that aside, it is clear from the explanatory document issued with the order that the intention is to concentrate on having tighter control of the miscellaneous Executive functions of the Departments. The question is whether the operation in which we are engaged this evening will accomplish that.
This is not the first attempt to do this. Clearly the thing slid down the hill from 1972 onwards. On 23 July 1976, the Department of the Civil Service was set up by splitting an existing Department into two. At that time, it was said:
The basis aim of the exercise is to free the head of the Northern Irish Civil Service for functions of co-ordination."—[Official Report, 23 July 1976; Vol. 915, c. 2433.]
One must assume that as we are now, five-and-a-half years later, destroying that very Department and, apparently, the very post that was set up, the system introduced by the right hon. Member for Lewisham, East (Mr. Moyle), when Minister of State, Northern Ireland Office, has been an abject failure. May we have confirmation of that when the Minister replies? There is no reason to destroy a system five-and-a-half years old unless it has been proven to be a failure. It seems strange that it is now necessary to dissolve the Department of the Civil Service.
Parliamentary questions in March and July again brought this matter to the surface, but I assume that it was rumbling around in the Northern Ireland Office for a considerable time before that, and that this is a further effort to bring revenue collection and revenue spending into balance through tight control.
Have these measures been opposed by the Civil Service unions in Northern Ireland? I believe that they have been. No doubt they have their own proposals, and whether one agrees with them would depend on how extensive was the individual's detailed knowledge of the workings of the Northern Ireland Civil Service. I have a high regard for those who work in it. They are a fairly efficient lot. If the machine is not up to scratch after 10 years of direct rule, it is long past the time when it should be brought up to scratch.
Will the Minister also say whether the proposals in the order have been welcomed by the legal pofession, either inside or outside the Civil Service Department? From where did these powers come? Did they come from the one source or from a variety of sources?
My experience of change is largely limited to the changes in local government in Northern Ireland 10 or 11 years ago, and the past few years have made me extremely cynical of change, especially if it is only for change's sake

and a cosmetic exercise. If there is to be change, it should be considerably for the better. There should be a vast improvement in the administration of the Province.
The order seeks to transfer miscellaneous powers under the control of the Department of the Civil Service to other Departments without public outcry or tremendous public opposition, yet the public will be affected by all these things.
The practice after transfer may not be as carefree as the exercise of transferring these functions. For example, the Department of the Environment will be the principal customer of the land registry, the registry of deeds and the ordnance survey, all of which hang together in a Northern Ireland context for historical reasons. Some people have suggested to me that the Department of the Environment will now be seen as the judge and jury and will also Jay down the charges for the various functions.
I am concerned about the Northern Ireland Department of the Environment, which is enormous. It takes up about 40 per cent. of the functions in Northern Ireland. It' it becomes much bigger, we shall not need any other Departments. The Department of the Environment seems to control almost very function that one can think of in Northern Ireland.
I am also advised that the land registry and the registry of deeds are semi-judicial bodies and that a Chancery Division judge directly supervises many of their functions. I wonder why—this is tied up historically with the ordnance survey and the registery of deeds—we are now taking those functions away from the courts. Would it not be better to move towards them rather than in the direction that we are moving now?
The problem is that the effort to separate the collection and the spending of moneys is not clear-cut in the way that the powers are being distributed. The functions that Ire transferred to the Department of Agriculture range from the various land laws, the land purchase Acts, the Public Works Loan Act, 1888, the Tithe Rentcharge (Ireland) Act 1888, through to the Local Government (Northern Ireland) Act 1972. One can see that those measures can be tied to agriculture.
Then we come to the functions that are transferred to the Department of the Environment. The Boundary Survey (Ireland) Act 1854, the Public Records (Ireland) Acts 1867 and 1875, Public Records (Northern Ireland) Act 1923, and the Registration of Deeds Act 1970 are all included. Some of those measures, such as the Public Records (Ireland) Acts 1867 and 1875, concern only historical records, which should be put together with ancient monuments and museums. I wonder whether the final home of all the functions has been properly thought through. The Department of the Environment is a vast organisation in Northern Ireland and I would hate to see it become much bigger. I am worried that matters that should perhaps be fitted in elsewhere are being transferred to the Department of the Environment, which experience will prove to be the wrong place.
Then we come to the enactments of functions that are transferred to the Department of Health and Social Services. That includes shop Acts, dog races, auctions, horse racing and betting, which seems to a be a queer mixture to be fed into the DHSS. There may be good reason for it, but we deserve an explanation.
Despite the clear efforts made to separate the functions, if we consider the Rates (Northern Ireland) Order 19'77, we find that the Department of the Environment and the


Department of Finance and Personnel seem to be tied together. Perhaps my reading of the order is wrong, but I wish the Minister to explain how he sees the problem of two Departments in friction over the same functions.
Perhaps I am overstating the case, but I believe that the problem of tight financial controls andthe separation of the functions of collecting and spending seem to be being tied together. I am worried about that. I cannot see how that will work in practice.
It is clear that the experience of the Department of the Civil Service has been unhappy. If that is so, we must have a clear explanation why the system that was set up five and a half years ago is now considered to have failed. If the Minister cannot give a full explanation tonight, perhaps he will write to me. However, as he has brought the order before us tonight, he will be able to give us a full explanation for the failure of the system set up by the previous Government. Many people in Northern Ireland think that, instead of the administration being improved over the years and becoming more effective and efficient, it has steadily become less effective and efficient, more remote and more annoying to the general public who must deal with it.
Let the Minister be in no doubt that, while we were unhappy with the changes made in 1976, now that it has been found that our forecasts and fears have been proven, we should like to be sure that what is being done this evening will not have to be reversed five and a half years hence.

Rev. Ian Paisley: I do not want to detain the House, but there are some matters on which I should like to question the Minister.
Will there be a large transfer of people to the Department of Agriculture, the Department of the Environment and the Department of Health and Social Services to look after the various matters listed in the schedules to the order? Has agreement been reached in the Civil Service about those transfers? Are the civil servants happy with the arrangements made for the various transfers?
In Northern Ireland we are living in times when employment is important. We cannot afford to have any more unemployed. The Minister must tell us exactly how many people will be transferred. Will they be assured of their place of work, in carrying out the duties transferred to the various Departments?
I echo a remark made by the hon. Member for Down, North (Mr. Kilfedder). I wonder why at this time the order has been laid before the House and why it seems so imperative that the change should be made. As the hon. Gentleman is aware, the Secretary of State is discussing with parties in Northern Ireland the setting up of an elected assembly and devolved government there. I say, with the hon. Gentleman, that surely it would be wiser, if the Government are to proceed along those lines, for that assembly, which will appoint the executive—the way in which it will do that is unknown—to have some say in what the departmental responsibilities should be and how they should be divided. Is the order a move towards saying that there will be a limitaton to Departments and that in future Northern Ireland will have X number of Departments?
The Minister should tell us something about the improvements that he envisages as a result of the order. Everyone agrees that Northern Ireland should be run and governed efficiently. I do not believe that anyone would disagree with the Minister about that. In what way do the Minister and his right hon. Friend consider that the present arrangement does not work adequately? Where has inefficiency been discovered? How will those inefficiencies be removed by the steps that he is taking, whereby we shall have more efficient government? The Minister has not explained the improvement that will result. So I hope that he will tell us about the improvements that he believes will take place.
I echo what was said by the hon. Member for Londonderry (Mr. Ross). The split of functions seems rather strange. I wonder, for instance why drainage goes to the Department of the Environment and not to the Department of Agriculture. No doubt the Minister can give us a reasonable answer.
The registrar for births, deaths and marriages was always part of the Department of Finance. Is that whole section now to be handed over to the Department of Health and Social Services? I hope that the Minister will say something about that.
The Minister said that the one post of permanent secretary is the only real saving that will take place. When the Department of Finance becomes the Department of Finance and Personnel, will the personnel part still retain a separate entity, or will there be a total merger? I hope that the Minister will explain how that will work in practice.
I finish by saying that it is strange to have this order before us and for the change to be made in this way and at this time.

Mr. J. Enoch Powell: One of the Minister's remarks was surprising. It was that the manpower consequences of the order were restricted to the elimination of one permanent head of a Department. It is remarkable, because it is contrary to nature. There is a parameter effect or structure in Departments whereby the creation or existence of the head of a Department automatically attracts with it the performance of other functions such as secretarial functions, personal functions, taking off his hat and coat, putting on his hat and coat. Without jocularity, services of that nature tend to multiply around persons of high estate in the ministerial or bureaucratic structure.
I had always believed that one of the best forms of economy in Government expenditure was the abolition of as many ministerial posts as possible. Of course, an interest acts in the contrary direction in the Whips' Office, where the magnification and multiplication of patronage is part of its business and necessary to its trade. Nevertheless, if we are looking for economy, I would say, like the lightning, strike in the highest places. The more heads we remove at the top, the more we can probably dispense with lower down.
I have been accused lately of dealing in paradox. I detect yet another paradox in that point—that point only—of the Minister's speech. Otherwise the order is legislation of a character which, with the passage of time, we come more and more to recognise, and that is legislation to put right our past mistakes.
A fashion is usually set by the work of some very distinguished commission. The hon. Member for Hammersmith, North (Mr. Soley) reminded us of the Fulton commission's function in stimulating this error, just as it stimulated many other errors and misconceptions about bureaucracy and the Civil Service. Having made that error in Great Britain—and as Britain is responsible, under direct rule, for the administration in Northern Ireland—we duplicated that error in Northern Ireland in 1976. Having repented of the error and having corrected it after several years, we are now putting things right in Northern Ireland.
Most hon. Members would probably be unemployed if we did not spend so much time reversing the things that those before us—or even ourselves, in earlier years—so confidently but now apparently mistakenly did. We are now all happily agreed that we were mistaken about having a separate Department of the Civil Service. [Interruption.] Perhaps I have misunderstood the hon. Member for Hammersmith, North. I thought that he was against a separate Department of the Civil Service and was in on the new fashion.
We are back to square one. Since my eye fell upon them, I cannot resist quoting certain words from Hansard. As a matter of fact, I was speaking then. I said:
I must say—and I suppose that I am betraying all the evidences of Anno Domini in saying it—that there was a great deal to be said for the old arrangement in the Civil Service."—[Official Report, 23 July 1976; Vol. 915, c. 2432.]
We are substantially returning to the other arrangement. What was taken out of the Department of Finance is now being restored. However, the Minister did not tell us about any modifications.
There is cause for undiluted satisfaction in the element in the order that refers to the separation of executive and financial functions. I can bear personal witness to the desirability of that. Twenty-five years ago, as Financial Secretary to the Treasury, I found myself responsible for two or three dozen minor Executive spending Departments. In endeavouring to restrain the growth of public expenditure there was a tension, which I managed to survive and an anomaly—I dare not say a paradox—between the functions of the Financial Secretary, particularly under the then Chancellor of the Exchequer, Lord Thorneycroft, and his functions as departmental Minister for spending Departments, however minor.
Therefore, the extension of the separation to Northern Ireland is correct. I am reminded of my responsibility for one of those Executive Departments, which I shall not specify. I shall entertain the House with an anecdote that is strictly in order. In those days, we endeavoured to keep expenditure for the coming financial year within the limits of the outturn for the past financial year. In the second half of any financial year, Treasury Ministers find themselves in that position. As the spending Minister for the Departments, as Financial Secretary, I used to send for the heads of the Departments and say "Sir so-and so"—I found that they were nearly always knights—"you will be aware that the Chancellor's policy is that there should be no increase in your small Department's expenditure compared with that expected in the current year."
I then went on to say that clearly this would mean some reduction in services to the public and clearly the Chancellor would need to know what defence he would have to make if there were to be a reduction of service as a result of this economy. I asked the gentlemen to go away

and let me have, in a week or two, if they could, a note of the reduction in public service which would follow if they were able to comply with the guidelines of the Chancellor.
I remember one particular case where Sir so-and-so went away like the young man in the Gospel, very sad. But he came back a much happier man, after 10 or 12 clays. On being wheeled in, as the expression went, by my private secretary, he could hardly wait to sit down before saying that he could do what I had asked and could fully comply with the policy of the Chancellor. I told him that this would surely mean a reduction in staff and that there would not be the service to the public from his Department that there then was. He replied that he could assure me that in those respects there would be no cause for complaint and nothing to defend.
I was very pleased, but was surprised when the assistant secretary in that branch of the supply division of the Treasury came to my room wearing a look of anything but pleasure. He said that he understood that Sir so-an 1-so had told me that his Department: could be reduced by 14 staff without any loss of efficiency or services to the public. He said "We think that you ought to know, Financial Secretary"—which was a phrase to which one became very accustomed, and he went on to tell me that the Department had been subjected to a careful examination by the organisation and methods section of the Treasury, which had recommended that there should be an increase of two in the staff of this Department.
So, the old two-headed combination in the person of the Financial Secretary to the Treasury now exploded into three of four Treasury Ministers under the new dispensations. That was not invariably inimical to economy, but I agree in principle that it is inimical to economy and financial control, and I think that it is right that that anomaly should be removed also from the structure and administration of Northern Ireland.

Mr. John Patten: I shall reply in reverse order to the points raised, and begin with the right hon. Member for Down, South (Mr. Powell). I hope that he was not including me as one of those Ministers who is simply the product of the patronage of the Whips' Office. It would have been the first offensive thing that he has ever suggested, in any intervention or speech. I do not want: to involve myself with him in the hunting of paradoxes, which has been a sport much noted in the public press in the last two or three weeks, with regard to the right hon. Gentleman's speeches. I enjoyed the anecdote with which he regaled the House, and which I am sure was entirely in order, about the period, 25 years ago, when he was what is now called, in fashionable shorthand, in the Treasury, FST.
However, circumstances change and the methods of Government that were deemed proper five and a half years ago, or 25 years ago, are not necessarily suitable in the circumstances of today. Flexible Government has, of course, to alter and to trim to changing circumstance, to make Government more, and not less, efficient. I have to refute the suggestion of the right hon. Gentleman that Her Majesty's Government are attempting to go against the laws of nature in their suggestions for the amalgamation of these two Departments. I never thought that the straightforward plan put forward in order to amalgamate the Department of Finance and the Department of the Civil


Service could give rise to an accusation of going against the laws of nature simply because it does not lead to a substantial reduction of staff. The order is not a staff reduction exercise.
The intention of the order is to increase the efficiency of the control of Government over resources and manpower, to make the organisation of the control of Government in these sectors more, rather than less, efficient by amalgamating two Departments and to hive off from them certain functions that go to other Departments. This is not a sinister Civil Service bashing and manpower reduction exercise.

Mr. J. Enoch Powell: I am sorry if I did not make myself clear. I did not say that the amalgamation of two Departments goes against the laws of nature. Their re-amalgamation in this case receives my approval and support. What I said was that to abolish the head of a Department without finding it possible to abolish other positions was, if not against the laws of nature, at any rate contrary to the results of experience.

Mr. Patten: It is true that one senior post of permanent secretary has been suppressed, dispensed with or found to be no longer necessary. Doubtless certain consequential changes will flow from this. Staff reduction in the Civil Service in Northern Ireland has been going ahead satisfactorily to plan. The fact that a substantal number of other posts are not consequentially suppressed as a result of the order pays right and proper tribute to the efficiency of the Northern Ireland Civil Service as it is, at the moment, properly constituted.
The hon. Member for Antrim, North (Rev. Ian Paisley) asked one or two specific questions that I shall endeavour to answer specifically before turning to a more general point with which I should like to deal. The number of civil servants transferred in the categories the hon. Gentleman requested are 10 to the Department of Agriculture, 1,800 to the Department of the Environment and 117 to the Department of Health and Social Services. I am also pleased to give the assurance that staff will be integrated into their new Departments and treated in relation to promotion and other staff conditions exactly as they would have been in the Departments that are being suppressed or altered.
I am pleased to report that the Civil Service is reasonably content with the proposals in the order. I should like to elaborate on this matter in concluding my remarks. I have been asked why the Government are proceeding at this stage to implement the order when they are also attempting, at the same time, a process of discussion with political parties in the Province to bring about the devolution back to the Province of some powers and responsibilities. The right hon. Member for Down, South might, I suppose, spot a paradox there.
I do not think that it is at all paradoxical because at the moment there is direct rule. The process of the revision of these Departments was begun about 18 months ago. The proposals contained in the order go a long way to standing on their own merit. They will increase efficiency. They will not increase efficiency by stamping out pre-existing inefficiencies or getting rid of many unnecessary civil servants who help people on with their coats and take Ministers' hats. In my 14 months in the Northern Ireland Office, I have never been treated to such service, although

it may have been current in the more polite days of 25 years ago when the right hon. Member for Down, South was Financial Secretary to the Treasury. I wonder whether today's FST receives that kind of treatment.
If the order is approved, it will improve efficiency by taking away a large number of extraneous tasks and allowing the new Department to concentrate on the disposition of financial resources and manpower across the whole range of Departments in the Province. That is the basis for the introduction of the order.
It would be pointless for me to speculate today about what is likely to happen in terms of the political development of the Province over future weeks and months. In a sense, the progress of devolution in the Province is in the hands of the right hon. Gentleman and his hon. Friends. In the meantime, direct rule continues and we must continue to make it as efficient and effective as possible.
In answer to the hon. Member for Londonderry (Mr. Ross), no one has said that the structure of Departments of the Northern Ireland Civil Service set up five and half years ago has been a failure or has gone wrong or has not produced results, but any system is a potential subject for improvement. We are seeing today the refinement of a system. We are trying not to do anything revolutionary but simply to bring together a pre-existent Civil Service set-up in two Departments to work more efficiently and to be more subject to ministerial control and direction.
The hon. Gentleman suggested that this would introduce friction between Departments. I am pleased to tell him that there is little or no friction between the Departments in Belfast today. There are already, and there will continue to be, considerable areas of overlap, but he may rest assured that friction will certainly not be caused by the transfer of the responsibilities listed in the schedules to the order.
Lastly, the hon. Gentleman asked specifically what the legal profession made of the proposals. It is true that there have been representations from some members of the legal profession to the effect that the order would introduce unnecessary costs and inconvenience to the legal profession because many changes in primary and secondary legislation would flow from it. We considered those representations, but we did not feel that they were adequate or sufficient in themselves to make us hold back from laying the order before the House.

Mr. Wm. Ross: May I surmise from what the Minister has said about large costs accruing to the legal profession that all the functions disappearing from the Department of the Civil Service, which is being abolished, will not return to where they were previously?

Mr. Patten: The Official Report will show what I said, but I do not think that I referred to "large" costs. I simply said that some sectors of the legal profession in the Province had suggested that there would be some costs and some inconvenience. In any reorganisation, there are inevitably transitional costs, and I am sure that there are transitional costs in the legal profession.
The hon. Member for Down, North (Mr. Kilfedder) also asked some specific questions as well as raising one important general point. Perhaps I may try first to satisfy him on the specific question with which he concluded—the paradox, as he saw it, that control over


public works would to some extent be split between the Department of the Environment and the Department of Agriculture.
The public works and buildings functions are concerned with the upkeep and maintenance of Government offices, as with the Property Services Agency on this side of the water, and, as with that agency, those functions have been transferred, reasonably enough, to the control of the Department of the Environment. The other functions which are being transferred to the Department of Agriculture relate to matters which are much more suitable to its control—land purchase, land improvement, tithe rent charges collection functions and similar matters. I shall write to the hon. Gentleman at greater length setting out the exact functions which are being transferred, and why they are being transferred in the case to which he referred.
The hon. Gentleman asked about why we had the new breed of civil servant in the Province called an under-secretary. He seems to think that he smells a rat, thinking that something underhand is going on and that it needs to be brought out into the open. He seems to think that the order gives life and legitimacy to that new breed. In fact, under-secretaries have been in post under that title for nearly a year. No new posts of under-secretary will be created as a result of the order.
The people who are happily and contentedly working at their tasks at that important grade in the Departments will not suddenly be directed in an underhand way to come across to the Northern Ireland Office in Great George Street and perform nameless tasks to do with relations with the Republic of Ireland. I am happy to give a clear assurance that within the limits of the changes in the order those people stay put and will not be up to any malevolent and underhand activities.
Last, and not least, in what has been a very interesting and probing debate, I turn to the remarks of the hon. Member for Hammersmith, North (Mr. Soley), the Opposition spokesman, who asked about the Ordnance Survey and the statistical services. There are no proposals for any changes in the Ordnance Survey in Northern Ireland flowing from the order. The Government will not be introducing changes in future weeks and months.
There is no reason why the Government's statistical services should suffer one iota from the side-effects of the order. We all recognise the great importance rightly given to accurate statistics, whether in social planning, in the planning of housing or in making us better informed about penal regimes—the sort of subject about which the hon. Gentleman bombards me with questions week after week. I do not think that I have ever failed to give him adequate statistics. I assure him that those statistics will continue to be available.
In what is essentially a debate on a Northern Ireland issue I do not want to indulge in cross-party warfare between the Government and the official Opposition, but I must say that on this occasion the hon. Gentleman has not got it right. He cannot reasonably say that we are indulging in Civil Service bashing by the order. I can see no evidence of that. We are not reducing staff, except for the one permanent secretary post, and the gentleman concerned has already left the service, having retired and not having been made redundant.
In the run-up to the order my noble Friend Lord Gowrie, the Minister of State responsible, has had full consultations with the trade union side. On this issue we have gone step by step with the trade unions. There was

a bilateral meeting on 13 November, when the Civil Service side discussed with my noble Friend the problems which it foresaw in the amalgamation of the Department of Finance and the Department of the Civil Service, should that amalgamation come about. In those discussions they quite rightly put forward their legitimate interests. During the discussions, the Government made to the trade union side some explicit concessions, such as transferring the Public Record Office to the Department of the Environment rather than to some other home, because the trade union side thought that would be the correct course to follow.
We were able to reassure it in two ways about a legitimate worry as to whether the important personnel function of the Department of the Civil Service would be downgraded. First, we told the trade union that it would continue to have the access it always had to senior management and, if necessary, to the Minister himself on Civil Service issues. Secondly, we were able to say that the head of the new Department, if it is set up, would become chairman of the Central Whitley Council. The trade union side had reasonably pressed for this. We were happy to agree because it is clear evidence of our good faith to allow the head of the new Department to carry on at the same level as he has always done in regard to the personnel function by which we set such great store.

Mr. Soley: Can the Minister explain his rationale to have more effective deployment of manpower resources? If that has any meaning, surely it must mean that at the end of the day some people will have more time on their hands as a result of doing the job more efficiently or effectively. If so, will the Minister shorten their working week? Will he give them jobs which ate not being done? Or at the end of the day will we end up with posts not being filled that would otherwise have been filled, with all the implications that that would have for employment?

Mr. Patten: I cannot speak in detail about an amalgamation which is about to happen, if it gets the approval of the House. I thought I had made it clear in my earlier remarks that it is not the intention of the order to reduce radically the number of people employed in the Northern Ireland Civil Service. I did not get in the hon. Gentleman's intervention any recognition of the fact that I put before the House that the trade union side seems content, because no representations about the effects o f the order have been made, to my knowledge, since 13 November. No one in the trade union has been in contact with my noble Friend, myself or anyone else concerned. Therefore, whatever else the order is doing, it is not bashing civil servants. If it is, the Northern Ireland. Civil Service, which is always vigorous in its own defence, is being uncharacteristically quiet about the effects of the order.
I do not intend to be drawn down the path of a full discussion of the transfer of functions and whether it is right or wrong to amalgamate the financial and personnel functions in a theoretical sense. As right hon. and hon. Gentlemen will know, this was the subject of a full debate in the House only a few weeks ago on 20 January. I would commend to the hon. Member for Hammersmith, North a full reading of the excellent speech by my hon. Friend the Minister of State, Treasury. He dealt more than adequately with these points and I have nothing to add to what he said.
Fulton, who has been decried in some quarters of the House and praised in others, was concerned with the efficiency of the Civil Service. So is this Administration. We believe that this order will promote that efficiency. It will litte by little bring better government to Northern Ireland. I commend it to the House.

Question put and agreed to.

Resolved,

That the draft Departments (Northern Ireland) Order 1982, which was laid before this House on 9 February, be approved.

Orders of the Day — CONSOLIDATION, &c., BILLS

Ordered,
That the Standing Order of 5th July 1979 relating to the nomination of the Joint Committee on Consolidation, &c., Bills be amended, by leaving out Mr. David Hunt and inserting Mr. Gary Waller.—[Mr. Lang.]

Orders of the Day — PARLIAMENTARY COMMISSIONER FOR ADMINSTRATION

Ordered,
That the Standing Order of 5th July 1979 relating to the nomination of the Select Committee on Parliamentary Commissioner for Administration be amended, by adding Mr. David Ginsburg.—[Mr. Lang.]

Orders of the Day — Council House Sales (Newham)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

Mr. Nigel Spearing: I am glad to raise this evening the question of the sales of council houses and the availability of housing in the borough of Newham connected therewith. I am pleased to see the Under-Secretary of State in his guise as representative of that Department for multicultural affairs. Newham is certainly a multicultural borough these days, with all the stresses that go with it. It is interesting that the preliminary census shows that it has lost less population than any other of the inner London boroughs with which it is classed for census purposes.
I am glad to read in the press that the Minister has a sense of humour. Perhaps we know that. However, I did not know that he watched "Fawlty Towers". We have plenty of faulty towers in Newham. There are over 60 of them. Rowan Point in my constituency fell down. Stratford Point and Newtown Point in the constituency of my hon. Friend the Member for Newham, North-West (Mr. Lewis) were blown up. Again in my constituency, Westland Point, Dunedin Point and Queensland Point on the Pier estate, North Woolwich, have had to be evacuated because they are not really safe or habitable. That means that in the last five blocks to which I referred 340 dwellings have been lost to the council by those causes alone.
Newham is not a one-type-of-house borough. About a third of the housing is private accommodation, a third is owner-occupied and a third is municipally owned. It is the policy of the Labour council and that of the Labour Party to encourage housing of all types, including housing to rent, housing for private ownership and housing for housing associations. That policy is being pursued in the borough. There are 34,000 municipal dwellings of which no fewer than 6,800 are high rise. There are 15,000 low rise dwellings and maisonettes and 11,500 houses, the latter being the most popular. There are over 7,000 family units on the waiting list, 1,527 of which have over the minimum points that entitle them to a needs rehousing allocation. Together with the homeless applications there are over 250 applications a month. The needs are great. We acknowledge that the HIP allocation in the last financial year has been better than in some authorities but, as I have said, the needs are great.
The Minister may refer to the legislation that has been enacted by the Government that requires local authorities to sell houses where application has been made by the sitting tenant. There have been discussions and over 2,000 tenants at one time were thought to be interested. I think that the Minister will agree that there are now fewer than that and that the original target set by his Department is being reduced. They are trying in the housing department to meet the target that has been set. I understand that there are now 400 fewer applicants. There are staffing difficulties and other difficulties because of the pressure of work on the district valuer.
It is not those houses to which I wish to refer because they are part of a well-known argument that is taking place across the country. I am concerned with the extraordinary position that there are over 60 new houses built for sale by the borough of Newham that have been lying empty for


over six months, both in my constituency and that of my hon. Friend the Member for Newham, North-East (Mr. Leighton), and more will be coming up to completion, making about 169 houses in that category.

Mr. Ron Leighton: Does my hon. Friend accept that there has been grave public concern that brand new houses have been boarded up? There have been visits from the chamber of commerce to complain about the boarding up. The council has done its best to sell the houses, but it has not been able to do so, although the houses are modestly priced at £25,000 to £28,000, because local citizens cannot pay the deposits and do not have the requisite salaries of £7,000 to £8,000. We are worried that the London Docklands Development Corporation has taken virtually all the land that is available to us and will devote virtually all of it for houses for sale. That means that the people who come to see us at our surgeries will not be able to buy them and our housing waiting lists will remain for ever.

Mr. Spearing: I thank my hon. Friend, because he has given a preview of the points that I intend to make to the Minister.
On the face of it, it appears unusual for a London borough such as Newham to have and to build houses for sale. A scheme was started by the council in 1971 under which young married people who might otherwise have had to move out of the borough were allocated council accommodation where they could save for a deposit. They could then put down the deposit and buy houses built by the council for that purpose. On 10 July 1973 the then Minister, now the Minister for the Arts, opened the Amity Road scheme and praised it to the skies. Since then about 394 houses have been sold. Over 300 couples are waiting in tower blocks to go into the houses which are now available.
The difficulty is that with the mortgage rate going up the threshold is about £7,000 or £8,000. With the best will in the world, they cannot afford that, although the houses are attractively built and priced, and are as near Parker Morris standards as makes no difference. A total of 169 houses are coming on stream and another 150 houses in the dockland area have been contracted for by the borough council with private builders for priority home purchasers. That over 300 houses are being made available for sale by the borough will put down the myth that borough councils, and Labour-controlled councils in particular, are not interested in private purchase.
The houses have been left empty. Some time ago the borough went to the Department of the Environment and said that it wanted sitting tenants to buy council houses. It said "Why cannot you let us sell these empty houses to tenants who wish to buy, allow us to put them in on the same terms and reductions as they would have if they were buying their own home, and move people from tower blocks into the vacated houses so that more tower block dwellings are available for people on the waiting list?" Unfortunately, the Department did not agree to that. It did not agree that the houses should be given the normal Exchequer subsidy for renting. So they have remained empty.
I am glad to say that more recently, and perhaps none too soon, the Department has given permission for share ownership schemes to be adopted in respect of those homes. Under the scheme the occupiers buy half the house

and rent the other half. That will bring down the mortgage threshold, but it may not be sufficient to enable people who have been saving in tower blocks to purchase them.
At the same time, in the Beckton development area in dockland, there was an agreed scheme for a mix of public, mid-tenure and houses for sale. That has been upset by the London Docklands Urban Development Corporation. Although housing associations are now allowed to purchase 120 homes, there is no guarantee that they can get the cash from the Housing Corporation. Even that scheme may be frustrated. It is important to Newham because many of the houses would be available for nomination by the borough.
The irony is that next Friday the Secretary of State for the Environment is ceremonially to open some of the show houses put up one of the four private builders in the Beckton redevelopment area. Those houses are priced at approximately the same level as those of the borough. My hon. Friend the Member for Newham, North-East has mentioned the borough prices. Three-bedroomed accommodation on this site will be £27,950. There will be a six weeks' option period for the 600 homes being built for all council tenants in Newham. However, I very much doubt, for the reasons that we have made clear, whether many of those tenants would be able to buy.
We are glad that some people in the area may be able to, but they will not be the people who deserve priority treatment. They will not necessarily be people in the borough. Some of the houses are priced more reasonably—£19,000 to £20,000 for what is described as a studio flat or one-bedroom flat, but local people who have looked at them call them Heseltine's hutches. 'They would not necessarily represent good value for money for anybody purchasing them.
The irony goes on. The key justification for the establishment of the London Docklands Development Corporation was that it would be able to provide private housing when it was assumed, in spite of evidence to the contrary, that none, or very little was already available. I quote from the House of Lords Select Committee report No. 198 on the development corporation order:
Private investors will not put money into docklands on any large scale unless they are encouraged by the presence of an environment attractive to them, including the availability of some private housing. Furthermore the evidence which the Committee have heard suggests that low-priced private housing might not be beyond the reach of some young people in docklands and that the present lack of it may be one of the causes of their drifting away from the area. On the other hand, it is to be remembered that council tenants now have the right to buy their homes, and this may contribute to a solution of the problem.
It will not contribute very much to a solution to the problem because the houses being built by the LDDC are not on the whole at a price that will enable the very young people that the House of Lords Select Committee suggested should be able to buy these houses to stay in the borough.
This means that the London Docklands Development Corporation has been established for purposes that it is apparently unable to carry out. The borough was already fulfilling that function beforehand. The houses were there, unoccupied. Another 80 in Liverpool Road in my constituency are due for completion in the next couple of months.
I suggest to the Department of the Environment, therefore, that the corporation is not fulfilling the objectives envisaged for it. I do not blame the corporation.
It has had a very difficult job. I suggest that the corporation's priorities are more in the realms of employment and an agreed plan for the Royal group of docks, which everybody from the Department to Mr. Ken Livingstone and all the local authorities wish to see. Let it concentrate on those matters and let the borough get on with the job that it was doing very well before—providing the sort of homes of a higher standard than those that private builders are able to provide, so that it will be possible for people who have been born, bred and brought up in the area, to purchase homes of their own if they wish, and contribute to the very lively community that is the London borough of Newham.

The Under-Secretary of State for the Environment (Sir George Young): I am very grateful to the hon. Member for Newham, South (Mr. Spearing) for raising this issue, and I thank him for his kind words about my new responsibilities.
He made some forthright statements about the Labour Party's commitments on home ownership, but I have to tell him that the performance of the London borough of Newham on delivering on the right to buy has been exceptionally disappointing, and, indeed, one of the worst in the country. My right hon. Friend the Secretary of State is looking very carefully at the council's performance in the light of the warning that we gave it on 22 October last year, and he is again contemplating giving the authority notice of intention to use his powers of intervention under section 23 of the Housing Act 1980.
If the hon. Gentleman is committed to giving council tenants the right to buy, as he said in his speech, I urge him to use his influence with his local authority so that those who have applied in the London borough of Newham to buy their homes—and some 2,000 are still waiting to hear from the council—may realise their aspirations. I am grateful to the hon. Member for what he said about the HIP allocation to Newham, which we have managed to increase.
I shall deal first with the issue of the young married couples' scheme. This was set up in 1969 to cater for young couples getting married who did not qualify for council accommodation and who could not afford at that stage to buy a house. The couples were allocated flats in tower blocks on a rental basis but were at the same time required to undertake to save regularly towards buying a new house that the council, meanwhile, would build.
That seems a very commendable scheme. It encouraged young couples to stay in the borough and made good use of tower block accommodation, which is unpopular with other tenants, and help youngsters to get their foot on to the bottom of the home ownership ladder.
For a number of years the scheme worked quite well. Provided it covered its costs, the Newham council was able to offer discounts to buyers of up to as much as 30 per cent. below the market value of the properties. The council has sold over 300 properties to young married couples under its houses for sale scheme.
Newham has been building houses under the scheme at various sites around the borough. In the late summer and autumn of 1980, 78 further houses on the Talbot Road, Langdon Road and Atlas Road sites were completed and these were offered for sale at prices averaging over

£27,000. The properties are all three-bedroomed and the majority—including all the town houses—have garages. As the hon. Member said, the prices were higher than those that had applied in other Newham developments under the sale scheme and proved to be largely out of the reach of first-time buyers. Moreover, the market values were generally below cost and Newham was, therefore, unable to offer the usual discounts. The council, finding the properties were beyond members of its young married couple's scheme, decided to extend the offer of sales to all council tenants and as a result managed to find a few more purchasers, with some prospective buyers waiting to see what happened to the rest of the properties before committing themselves.
I understand that, in the face of its inability to sell these houses as originally planned, Newham then considered a number of options open to it. It looked at the possibility of a leasehold scheme with an option to purchase the freehold at the end of the option period. It also considered selling the houses to developers or putting them for sale on the open market, as well as exploring the possibilities of a shared ownership scheme. In the event, Newham council came to the conclusion that from its point of view the best solution would be for it to take all the unsold houses into its rented stock.
The council then approached my Department seeking agreement to the Talbot Road and Langdon Road properties being taken into its rented stock and to the costs of these properties being eligible for housing subsidy purposes. The council left aside the question of the 18 unsold houses at Atlas Road which it had funded from capital receipts and which would, therefore, involve the council in making a rather more detailed application.
On 27 November last my Department wrote to the Newham council saying that it could not agree to the council's request for the unsold houses at Talbot and Langdon Roads being transferred to the council's rented stock. Instead, we urged the council to consider either selling the unsold houses on the open market or making sales under a shared ownership scheme.
The borough council has not so far raised with my Department the question of unsold houses at either Sheppard Street or Liverpool Road sites. I gather that the Sheppard Street development is quite small, amounting to seven houses, all of which have been completed and of which five remain unsold. Liverpool Road is a much bigger development amounting to 86 houses. None of these has as yet been completed and the first houses from this development are now expected to be ready in April. The development is expected to be completed by about October 1982.
I believe that these two options that were put to the Newham council provide the best way forward for dealing with the problem of these unsold houses and I hope very much that sales can be arranged quickly to bring these properties into use.
Sale on the open market has many attractions and it would, of course, be open to the council, if it chose to adopt this course, to give priority to applications from those in accepted housing need in the borough. However, I understand that the Newham council has now decided that rather than outright sale it would prefer to opt for a shared ownership scheme.
I am pleased that Newham council is prepared to adopt this course because it has proved to be enormously successful in bridging the gap between owning and


renting. In response to the intervention of the hon. Member for Newham, North-East (Mr. Leighton), may I say that this brings home ownership more within reach of couples on average incomes because they have to purchase only half the property.
The London borough of Newham has taken an important step forward in deciding to adopt shared ownership schemes for these unsold dwellings, and the initial capital payment and monthly mortgage payments may be less than if an outright purchase had been made. Of course, the outgoings may be higher than if the property had simply been rented, but the purchaser is then enjoying a capital stake in his or her own home, which carries with it the possibility of tax-free capital appreciation.

Mr. Spearing: I do not agree with the sale to sitting tenants of the house, although that is the law. I am in favour of the sort of arrangement that the Minister is now describing. Can he confirm that the houses in Liverpool Road are of the same price range as those being built elsewhere by private builders and are not markedly more expensive—indeed, that they may be of a higher standard and better value for money?

Sir George Young: The hon. Gentleman is right, but the crucial difference between the ones built by the council and those built by the private developers is that the council has never put its property on the open market. It has always restricted the sale to sitting council tenants. Therefore, it has not got the broad market that it might have, whereas if the option is not exercised in the first month, the private developer has the right to broaden the market.
The second crucial difference is that the private developers have invested their own money in the schemes. Therefore, they have satisfied themselves that there is a market. They are commercial people operating in an area that they know very well. My understanding is that they would not have made these decisions unless they thought that there was a market. It may be that the sites or properties are more appropriate, but clearly they have done their homework and think that there is a market for the types of property they are building in these locations.
We must hope that the shared ownership scheme proves a success so that the houses we have been talking about can be occupied quickly. I also hope that the council will in due course be prepared to consider extending the scope of the scheme to other properties in its ownership.
I turn to the question of docklands. Both hon. Members have consistently refused to recognise the co-operation that exists between the LDDC and Newham borough council. The corporation is contributing £750,000 to borough housing schemes in docklands to enable them to proceed forthwith, and borough tenants, waiting list applicants and clearance area families are being offered first option to purchase the homes that are now being built by the private sector in Newham.
I accept that housing associations can make a positive contribution to docklands regeneration. As I think the hon.
Gentleman knows from the letter that he received from the Housing Corporation, officials of the two corporations are meeting to work out exactly what can be provided.
The hon. Gentleman mentioned the Cyprus 3 site, which is a good example of what the private sector can achieve. Four major builders have committed themselves to a substantial investment of more than 600 low-cost homes, and my right hon. Friend will be opening the first phase later this week, just four months after construction began.
Discussions are taking place about the possibility of making a proportion of these homes available to housing associations to introduce a mix of tenures. It would be premature to anticipate the results of these discussions, but I understand that the housing corporation is hopeful that it might fund such an arrangement.
The hon. Gentleman suggested that builders operating in docklands will run into the same sort of problems ever sales as the London borough of Newham. As I said earlier, I do not think that there is a parallel. The builders' activities in docklands represent a substantial investment on their part, which means that they are convinced that there is a market here. After an initial period of a month, during which council tenants and those on the waiting list have preference, the builders will then throw open sales of their houses to anyone interested. That is perhaps where Newham council has run into difficulty with its sales scheme. Had the council been prepared to offer its dwellings on the market without any restriction, we might not be having this debate tonight.
When hon. Members say that the rest of Docklands should be developed for rent rather than for sale, they ignore one crucial ingredient—money. The option is not between private developers developing docklands and the local authority developing it for rent, because the money is not there. If the private developers do not develop the land, no one will, because Newham's HIP allocation, or the Housing Corporation's money, will not stretch to that. It is sensible, in view of the employment position arid housing stress in London, to make progress with low-cost home ownership and to involve the private sector and its resources whenever we can.
That part of London needs a substantial injection. of owner-occupation to get the tenure balance right. I am delighted that we have been able to help to tackle the problems in this part of London by harnessing the energy resources of the private sector. I hope that the buildings being constructed will be popular and that hon. Members will do what they can to encourage people to invest in them. That is the only way forward, given the restraints on public expenditure, if we are to tackle the housing stress that both the hon. Gentleman and the hon. Member for Newham, North-East face.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Twelve o'clock